Distinguish between the following: (i) Revenue Receipts and Capital Receipts (ii) Revenue Deficit and Fiscal Deficit

(i)

Revenue Receipts-The receipts which neither create any liability nor lead to any reduction in assets are called Revenue Receipts.

Capital Receipts-Capital receipts are receipts that either create liability or reduce assets.

(ii)

Revenue Deficit: When revenue receipts are less than the revenue expenditures in a government budget, this shortfall is termed as Revenue Deficit.

Revenue Deficit = Revenue Expenditure - Revenue Receipts

Fiscal Deficit: The excess of the total expenditure (revenue and capital expenditure) over the total receipts excluding borrowings (revenue and capital receipts) over a period of one accounting year, is termed as Fiscal Deficit.

Fiscal Deficit = Total Budget Expenditure - Total Budget Receipts (Excluding Borrowing)