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The Government : Budget And The Economy
Question
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Distinguish between revenue deficit and fiscal deficit.

Answer

Basis of Difference Revenue Deficit Fiscal Deficit
Meaning It may be defined as the excess of revenue expenditure of the government over its revenue receipts. It may be defined as the excess of the total budget expenditure over total budget receipts net of borrowings.
Significance A revenue deficit in the government budget imply that the routine receipts of the government are not enough to meet its routine expenditures A fiscal deficit signifies the borrowings of the Government i.e. the debt capital receipts of the government.
Formula Revenue Deficit = Revenue Expenditure − Revenue Receipts Fiscal Deficit = Total Budget Expenditure − (Total Budget Receipts − Borrowings)
i.e. Fiscal Deficit = Borrowings

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Some More Questions From The Government : Budget And The Economy Chapter

Define a tax.    

Distinguish between Direct and Indirect taxes.
or
What is the basis of classifying taxes into direct tax and indirect tax? Give an example of each. 

Classify the following into direct and indirect tax. Give reasons.
(i) Wealth tax, (ii) Entertainment tax, and (iii) Income tax. 

What is meant by Budget (Government) Expenditure? Describe its components (items).

Distinguish between revenue expenditure and capital expenditure.
or
What is the basis of classifying government expenditure into revenue expenditure and capital expenditure? 

Why are subsidies treated as revenue expenditure? 

Why is payment of interest a revenue expenditure?

Why is repayment of loan a capital expenditure? 

Giving reasons categorise the following into revenue expenditure and capital expenditure. 
(i) Subsidies, (ii) Grants, (iii) Repayment of loan, and (iv) Construction of school building.

Difference between Plan and Non-plan Expenditure.