What is Revenue Receipts (RR), Revenue Deficit (RD), Budgetary Deficit (BD), Effective Revenue Deficit (ERD), Fiscal Deficit (FD)
Revenue Receipts: Income earned by the government that does not create liabilities or reduce assets. Revenue Deficit: When the government’s revenue ex
What is Revenue Receipts (RR), Revenue Deficit (RD), Budgetary Deficit (BD), Effective Revenue Deficit (ERD), Fiscal Deficit (FD)
1. Revenue Receipts (RR): Definition : Income earned by the government that does not create liabilities or reduce assets. Types :
Tax Revenue : Income from taxes like income tax, GST, etc. Non-Tax Revenue : Income from fees, fines, interest, dividends, etc. Formula : RR = Tax Revenue + Non-Tax Revenue 2. Revenue Deficit (RD): Definition : When the government’s revenue expenditure exceeds its revenue receipts. It indicates a shortfall in meeting operational expenses. Formula : RD = Revenue Expenditure - Revenue Receipts Implication : A high RD means the government is borrowing to meet its day-to-day needs, which is not sustainable. 3. Budgetary Deficit (BD): Definition : The total shortfall when the government’s expenditure (both revenue and capital) exceeds its total receipts (excluding borrowings). Formula : BD = Total Expenditure - Total Receipts (excluding borrowings) Current Relevance : This term is no longer in official use in India and has been replaced by more specific deficits like Fiscal Deficit and R…
