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Question
Distinguish between revenue deficit and fiscal deficit.
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Solution
| Sr. No. | Basis of difference | Revenue deficit | Fiscal deficit |
| 1. | Meaning | Excess of revenue expenditure of the government over its revenue receipts. | Excess of the total budget expenditure over total budget receipts net of borrowings. |
| 2. | Significance | The regular receipts of the government are not enough to meet its regular expenditures. | The borrowings of the government, i.e., the debt capital receipts of the government. |
| 3. | Formula | Revenue deficit = Revenue expenditure − Revenue receipts | Fiscal deficit = Total budget expenditure − (Total budget receipts − borrowings) i.e. Fiscal deficit = Borrowings |
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| S.No. | Items | 2021-22 (₹ in crore) |
| (i) | Revenue Receipts | 20 |
| (ii) | Capital Expenditure | 15 |
| (iii) | Revenue Deficit | 10 |
| (iv) | Non-debt creating capital receipts | 50% of revenue receipts |
| (v) | Interest Payments | 4 |
