Present fiscal deficit, primary deficit, revenue deficit
Answers
What is revenue deficit?
The revenue deficit mentions to the surplus of government’s revenue expenditure over the revenue receipts.
Revenue deficit = Revenue expenditure – Revenue Receipts
This deficit only incorporates current income and current expenses. A high degree of deficit symbolizes that the government should reduce its expends. The government may raise its revenue receipts by rising income tax. Disinvestment is selling off assets is another corrective measure to minimize revenue deficit.
What is Fiscal Deficit?
Fiscal deficit is the distinction between the government’s total expend and its total receipts and this excludes borrowing.
Gross fiscal deficit = Total expenditure – (Revenue receipts + Non-debt creating capital receipts)
The fiscal deficit has to be financed by borrowing. Hence, it manifests the total borrowing necessities of the government from all the possible sources. From the financing part –
Gross fiscal deficit = Net borrowing at home + Borrowing from RBI + Borrowing from abroad
What is Primary Deficit?
A primary deficit is the amount of money that the government requires to borrow apart from the interest payments on the formerly borrowed loans. We must make a note that the borrowing necessity of the government comprises interest responsibilities on the collected amount of debt. The aim of quantifying the primary deficit is to concentrate on current fiscal imbalances. To attain an approximate of borrowing on account of current expends overreaching revenues, we need to compute what has been known as the primary deficit. It is the fiscal deficit – the interest payments.
Gross primary deficit = Gross fiscal deficit – Net interest liabilities
Net interest liabilities comprise of interest payments – interest receipts by the government on net domestic lending.