Question
Define (i) Fiscal deficit, (ii) Budget deficit, (iii) Revenue deficit, and (iv) Primary deficit.
Solution
(i) Fiscal deficit is defined as excess of total expenditure of government over sum of its revenue receipts and non-debt capital receipts during a fiscal year.
(ii) Budget deficit refers to the excess of total budgetary expenditure over total budgetary receipts (both revenue receipts and capital receipts) of the government.
(iii) Revenue deficit refers to the excess of governments revenue expenditure over its revenue receipt.
(iv) Primary deficit is defined as fiscal deficit minus interest payments on previous borrowings. It indicates how much of government borrowing is required to meet expenses other than interest payments.
