Question

What are revenue deficits and their implications?

Answer 1

At the point when the revenue receipts are not exactly the same as or below the revenue expenditure in the public authority financial plan, this deficiency of receipts is known as income deficit.

The implications of a revenue deficit are:

• The higher future burden of loan and interest payments on the government.
• The huge expenditure on administration and maintenance.
• Higher inflation.
• Increase in government liability.

Also see:

• Budget Deficit
• Trade Deficit
• Primary Deficit