Explain ‘Revenue Deficit’ in a Government budget? What does it indicate?

Revenue deficit is the gap between the consumption expenditure (revenue expenditure) of the Government and its current revenues (revenue receipts). It also indicates the extent to which the government has borrowed to finance the current expenditure. Revenue receipts consist of tax revenues and non-tax revenues. Tax revenues comprise proceeds of taxes and other duties levied. The expenditure incurred for normal running of government functionaries, which otherwise does not result in the creation of assets is called revenue expenditure.
Revenue Deficit = Revenue Expenditure - Revenue Receipts
Indications of Revenue Deficit:
The revenue deficit indicates the following points.
i. It reflects the government fiscal policy.
ii. It indicates the need for government’s borrowings to finance its consumption expenditures and revenue expenditures such as payments to government employees, etc.
iii. Revenue deficit implies unsoundness of the financial system of an economy.
An increase in revenue deficit implies a proportional increase in the fiscal deficit.