What is a revenue deficit in the government budget?

Question

Question

This question was previously asked in

SSC CHSL Exam 2024 Tier-I Official Paper (Held On: 11 Jul, 2024 Shift 3)

Answer 1

The correct answer is The excess of expenditure over revenue, including interest payments on debt

Key Points

The excess of expenditure over revenue, including interest payments on debt is known as a revenue deficit in the government budget.
A revenue deficit indicates that the government's revenue receipts are not sufficient to meet its revenue expenditure.
This type of deficit is a key indicator of the financial health of the government and reflects its ability to manage its finances.
A persistent revenue deficit can lead to higher borrowings and increased debt burden for the government.
Reducing the revenue deficit is crucial for maintaining fiscal discipline and ensuring long-term economic stability.

Additional Information

Revenue receipts include tax revenues (like income tax, corporate tax, GST) and non-tax revenues (like interest receipts, dividends, and profits from public sector enterprises).
Revenue expenditure includes expenses incurred for the normal functioning of government departments and various services, interest payments on debt, and subsidies.
Unlike capital expenditure, revenue expenditure does not result in the creation of assets or reduction in liabilities.
Efforts to reduce revenue deficit may include enhancing revenue receipts through better tax compliance and administration, and rationalizing expenditure.
The government may also implement structural reforms to improve the efficiency and productivity of public sector enterprises.