Glossarytaught in M7.04
Revenue deficit
Also called revenue deficit, current deficit.
The part of the government's shortfall that funds consumption rather than investment.
As an identity, fiscal deficit equals revenue deficit plus capital spending less non-debt capital receipts. Those receipts include loan recoveries and disinvestment proceeds. A ₹17 lakh crore fiscal deficit with ₹11 lakh crore of capital spending and ₹0.6 lakh crore of non-debt capital receipts implies a revenue deficit of ₹6.6 lakh crore.
Borrowing to build a road that raises future output is different from borrowing to pay salaries. Borrowing for the road can be self-financing; borrowing for salaries adds to debt with no corresponding asset.
The composition tells you more than the total does.
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