Differentiate between Revenue deficit and Fiscal deficit.

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Solution

Revenue deficit
Fiscal deficit
It results when revenue receipts are less than the expenditure. It is the difference between total revenue and total expenditure of the government (excluding borrowing).
It arises when the government’s actual net receipts are lower than the projected receipts. It indicates the dependency on loans in near future. It arises due to hike in capital expenditure. It is an indicator of the total borrowings needed by the government.

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Revenue deficit	Fiscal deficit
It results when revenue receipts are less than the expenditure.	It is the difference between total revenue and total expenditure of the government (excluding borrowing).
It arises when the government’s actual net receipts are lower than the projected receipts. It indicates the dependency on loans in near future.	It arises due to hike in capital expenditure. It is an indicator of the total borrowings needed by the government.