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revenue deficit in India is ? negative or positive
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revenue deficit in India is ? negative or positive
Revenue Deficit in India: Negative or Positive?
Revenue deficit is a situation where the government's revenue falls short of the projected expenditure. In other words, when the government is spending more than it is earning, then it is said to have a revenue deficit. The revenue deficit has a direct impact on the economy.
Current Status of Revenue Deficit in India
As per the Union Budget 2021-22, India's revenue deficit is expected to be Rs. 18.48 lakh crore. This is a significant increase from the previous year's revised estimate of Rs. 9.54 lakh crore. This means that the government is spending more than it is earning, and this has a direct impact on the economy.
Impact of Revenue Deficit on the Economy
Revenue deficit has several negative impacts on the economy, including:
- Increased Borrowings: When the government has a revenue deficit, it needs to borrow more to meet its expenditure. This leads to an increase in the government's borrowing, which can lead to a rise in interest rates.
- Inflation: When the government borrows more, it increases the money supply, which can lead to inflation.
- Reduced Capital Expenditure: When the government has a revenue deficit, it tends to cut down on capital expenditure, which can have a negative impact on the economy's growth.
Conclusion
Revenue deficit is a matter of concern for any government, as it has a direct impact on the economy. In India's case, the revenue deficit has been increasing over the years, which is a cause for worry. The government needs to take steps to increase its revenue and reduce its expenditure to bring down the revenue deficit. This can be done by increasing tax revenues, reducing subsidies, and promoting economic growth.
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revenue deficit in India is ? negative or positive
Positive
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revenue deficit in India is ? negative or positive for CA Foundation 2024 is part of CA Foundation preparation. The Question and answers have been prepared according to the CA Foundation exam syllabus. Information about revenue deficit in India is ? negative or positive covers all topics & solutions for CA Foundation 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for revenue deficit in India is ? negative or positive.
revenue deficit in India is ? negative or positive for CA Foundation 2024 is part of CA Foundation preparation. The Question and answers have been prepared according to the CA Foundation exam syllabus. Information about revenue deficit in India is ? negative or positive covers all topics & solutions for CA Foundation 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for revenue deficit in India is ? negative or positive.
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