Variants of Deficit

Revenue Deficit
1. Revenue Deficit = Revenue expenditures Revenue receipts
2. Revenue expenditure includes government spending on goods and services which do
not result in asset creation.
3. Revenue receipts includes tax receipts and non tax receipts
4. Revenue Deficit reflects the inability of the government to meet day to day expenses out
of the current income
Capital Deficit
1. Capital Deficit = Capital expenditures Capital receipts
2. Capital expenses cause variation in the physical and financial assets
3. Capital receipts = Recovery of loans + Disinvestment proceeds + Borrowings
4. Reflects that the government is borrowing to meet its investment reuirements
5. !his deficit is used for funding assets that add on to the productive capacity" hence is not
a great worry#
Budget Deficit
1. Budget Deficit = !otal $xpenditures !otal Receipts
i. !otal $xpenditure = Revenue expenses + Capital expenses
ii. !otal Receipts = Revenue receipts + Capital receipts
Fiscal Deficit
1. %iscal Deficit = !otal $xpenditure & 'Revenue Receipts( + Recovery of loans + )ther
receipts 'mainly *+, disinvestment proceeds(-
2. .t reflects the sustainability of the total expenditure by the revenue receipts and the
capital receipts without borrowing.
Primar Deficit
1. *rimary Deficit = %iscal Deficit .nterest *ayments
2. .t reflects that the government/s revenue is not sufficient to meet the non interest
expenditure