CONCEPTS OF DEFICITS AND FRBM ACT, 2003
31Mar
Q1. Write a note on concepts of deficits and their trends.
Ans . CONCEPTS OF DEFICITS:
INTRODUCTION :
A public budget is a systematic estimate of government's revenue and expenditure for a period of one year. It shows the planned expenditure of the government and the expected revenue from taxes and other sources during a given year. A public budget can be balanced, surplus or deficit. A deficit in a budget indicates excess of expenditure over receipts.
CONCEPTS:
In India, the budget has always shown deficit. A deficit in the budget has many implications for the economy and it influences the process of policy making. The followings are the various concepts of deficits and their changing trends in India.
1) REVENUE DEFICIT :
Revenue deficit takes place when revenue expenditure exceeds revenue receipts.
Revenue receipts comprises of direct and indirect taxes, fees, fines, and surpluses of public enterprises, etc.
Revenue expenditure is the expenditure incurred on administration, defence, interest payments and subsidies.
Trends :
The Government of India has shown the following trends in Revenue Deficit:
Yr .
Rs . ( in crores)
% of GDP
1990-91
18,562
3.3
2007-08
52,569
1.1
2009-10
2,82,735
4.6
Revenue deficit has increased to a great extent since 1990-91. The major ... [more..]
Read User's Comments






