Question

From the following data about a govt. budget find: a) Revenue deficit b) fiscal deficit c) Primary deficit Items ( amount in rupees) Tax revenue 1037 Revenue expenditure 2811 Interest receipts by the govt. on net domestic lending 400 Dividends and profits on investments 600 Recovery of loans 135 Capital expenditure 574 Proceeds from sale of shares in PSUs 100 Interest payments on accumulated debts 1013 ​

Answer 1

Answer:

a) Revenue deficit = revenue expenditure - revenue receipts = 45000 - 35000 = 10000

b) Fiscal deficit is equivalent to borrowings. Therefore, fiscal deficit = 12000

c) Primary deficit = fiscal deficit - interest payments = 12000 - (30 *10000) = 12000 - 3000 = 9000