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, ....