Question

From the following data about a government budget find (a) revenue deficit, (b) fiscal deficit and (c) Primary deficit:

(Rs. arab)

i)Plan capital 120 expenditure

ii) Revenue expenditure 100

iii) Non-plan capital 80 expenditure

iv) Revenue receipts 70

v) Capital receipts net of borrowing 140

vi) Interest payments 30

Answer 1

(a) Revenue deficit = ​Revenue expenditure - Revenue receipts = 100 - 70 = 30

(b) Fiscal deficit = Revenue expenditure + Plan capital expenditure + Non-plan capital expenditure - ( Revenue receipts + capital receipts net of borrowing

= 100 + 120 + 80 - ( 70 + 140)
= 300 - 210
= 90

(c) ​Primary deficit = Fiscal deficit - interest payment
= 90 - 30
= 60