Distinguish between: (a) Direct tax and Indirect tax. (b) Primary deficit and Revenue deficit.

(a) (i) Direct Tax-A tax which is paid by the same person on whom it has been levied is termed as Direct Tax. In case of direct tax, burden can not be shifted on other party e.g. Income Tax.

(ii) Indirect Tax-It is a tax which is paid by one person and levied on other person. In case of indirect tax, burden is generally shifted on other party. e.g., Excise Duty.

(b) (i) Primary Deficit-The difference between the fiscal deficit and interest payment is termed as Primary Deficit. Primary Deficit = Fiscal Deficit - Interest Payments.

(ii) Revenue Deficit-When revenue receipts are less than the revenue expenditures in a government budget, this short fall is termed as Revenue Deficit. Revenue Deficit = Revenue Expenditure - Revenue Receipts.