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Question

Calculate Revenue Deficit, Fiscal Deficit and Primary Deficit from the following data:

   Items                                                              (Rs in crore)

(i) Revenue expenditure                                    22,250

(ii) Capital expenditure                                      28,000

(iii) Revenue receipts                                        17,750

(iv) Capital receipts (net of borrowing)              20,000

(v) Interest payments                                          5,000 

(vi) Borrowings                                                  12,500


Solution

1. Revenue Deficit = Revenue expenditure - Revenue receipts

                               = Rs. 22,250 crore - Rs. 17,750 crore

                               = Rs. 4,500 crore

2. Fiscal deficit = Revenue expenditure + Capital expenditure - Revenue receipts - Capital receipts (net of borrowings) = Borrowings = Rs. 12,500 crore

3. Primary Deficit = Fiscal deficit - Interest payments

                        = Rs. 12,500 crore - Rs. 5,000 crore

                        = Rs. 7,500 crore

Revenue deficit = Rs. 4,500 crore

Fiscal deficit = Rs. 12,500 crore

Primary deficit = Rs. 7,500 crore


Economics

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