Definition of effective revenue deficit and primary deficit
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Primary deficit refers to difference between fiscal deficit of the current year and interest payments on the previous borrowings. Primary Deficit = Fiscal Deficit – Interest Payments
Effective Revenue Deficit is the difference between revenue deficit and grants for the creation of capital assets. In other words, the Effective Revenue Deficit excludes those revenue expenditures which were done in the form of grants for the creation of capital assets. Effective Revenue Deficit was introduced in the Budget of 2011-12 for the first time. In 2012-13, Effective Revenue Deficit was introduced as a fiscal parameter.
Effective Revenue Deficit is the difference between revenue deficit and grants for the creation of capital assets. In other words, the Effective Revenue Deficit excludes those revenue expenditures which were done in the form of grants for the creation of capital assets. Effective Revenue Deficit was introduced in the Budget of 2011-12 for the first time. In 2012-13, Effective Revenue Deficit was introduced as a fiscal parameter.
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