Printing more currency by RBI for meeting the deficit, also called deficit financing leads to the availability of more money in the market, leading to inflation.

How to exactly differentiate primary Deficit and Fiscal Deficit? In calculating the primary deficit, spending does not include interest on the national debt. A government can resort to such practices by easily altering, The difference between total revenue and total expenditure of the government is termed as fiscal deficit. It indicates the total borrowing requirements of the government, including interest. Service Tax was earlier levied on a specified list of services, but in th, Direct tax is a type of tax where the incidence and impact of taxation fall on the same entity.

The implication is that interest payments are singled out as a special category of the budget. 3-Total Expenditure (1+2) = ₹300000 + ₹100000 = ₹400000, 6- Total Receipts (4+5) = ₹250000 + ₹150000 = ₹400000, Revenue Deficit = Revenue Expenditure - Revenue Receipts, Revenue Deficit ( 1 - 4 ) = ₹300000 - ₹250000 = ₹50000, Effective Revenue Deficit = Revenue Deficit - Grants for capital Creation, Effective Revenue Deficit ( 7 - 1c ) = ₹50000 - ₹30000 = ₹20000, 1-Free Market                   2-Mixed Economy                   3-Command economy, Four factors which can improve the quality of human resources -1- Better Education and health 2- Better living conditions 3- Economics and Psychology 4- Practical knowledge. It is generally used as a basic measure of fiscal irresponsibility. What is economics? The formula for the primary deficit is expressed as follows. The formula for revenue deficit can be expressed as, Revenue Deficit = Total Revenue expenditure – Total Revenue receipts, Revenue deficit has the following impacts on the economy, The following remedial measures can be taken by the government in reducing the deficit. The transfer of ownership, property or business from the government to the private sector is termed privatization. The definition of revenue expenditure tells that Revenue expenditure is on pension, the salary of government employee and grants they do not make any productive assets. Price floor is a situation when the price charged is more than or less than the equilibrium price determined by market forces of demand and supply.

ADVERTISEMENTS: Primary Deficit in Budget: Meaning, Implication and Comparison! Fiscal deficit helps in understanding the shortfall that the government faces while paying for the expenditures in the absence of lack of funds. When that amount is deducted from the principal loan amount, that is the primary deficit. Never miss a great news story!Get instant notifications from Economic TimesAllowNot now.

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