Question

Short answer type questions:
Distinguish between: (I) Direct tax and indirect tax (ii) Revenue deficit and fiscal deficit.

Answer 1

A direct tax is the one the final burden of which is borne by the person on whom it is imposed. Example: income tax.

An indirect tax is the one the final burden of which can be shifted to other persons. Example: sales tax.

Revenue deficit is the excess of revenue expenditure over revenue receipts.

Fiscal deficit is estimated,accounting all receipts and expenditure of the government. It is the excess of total expenditure ( revenue+capital expenditure) over total receipts ( revenue+ capital receipts)