1.

Explain briefly revenue deficit.

Answer»

Revenue deficit:

  • When the total expenditure of the government on revenue (current) account is more than total receipts of the government on the revenue account it results in revenue deficit.
  • Revenue account contains current transactions of the government. A deficit in this account means that the government is not able to meet its routine ‘ expenditures from its current income.
  • Revenue deficit shows’ inefficient working of government.

Solution:

Revenue deficit can be overcome by increasing borrowings on the capital account.


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