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Question

From the following data about a government budget, find (a) Revenue Deficit, (b) Fiscal Deficit and (c) Primary Deficit:
Particulars(Rs. Arab)
(i) Tax Revenue47
(ii) Capital Receipts34
(iii) Non-tax Revenue10
(iv) Borrowings32
(v) Revenue Expenditure80
(vi) Interset Payments 20

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Solution

a) Revenue deficit = revenue expenditure - revenue receipts
= revenue expenditure - ( tax revenue - non tax revenue)
= 80 - (47+10) = 80 - 57 = 23
b) Fiscal deficit is equivalent to the borrowings. Therefore, fiscal deficit = 32.
c) Primary deficit = Borrowings - interest payments = 32 - 20 = 12.

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