Budget Deficit & Measures to Reduce Them

Revenue Deficit

  • The shortfall between the total revenue received to the total revenue expenditure is revenue deficit. Revenue deficit = Total revenue expenditure – Total revenue receipts
  • Indication/Impact: This deficit only includes current income and current expenses. A high value of deficit indicates that the government should cut down on its expenditures.
  • Measures to Reduce: The government may increase its revenue receipts by increasing tax income. Disinvestment which means selling off assets is another remedial measure to reduce revenue deficit.

Fiscal Deficit

  • A fiscal deficit is a gap by which government’s total expenditures exceed the government’s total generated revenue. This, ....
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