Revenue Deficit: Revenue deficit is the excess of current revenue expenditure over the current revenue receipts.
Revenue Deficit = Current Revenue Expenditure - Current Revenue Receipts
Current revenue expenditure includes both plan and non-plan expenditure of the government to be met through revenue receipts. Current revenue receipts include the net tax and non-tax revenue receipts of the central government. Until the middle of 1970's, the central government in India enjoyed revenue surplus as the revenue receipts of the central government exceeded the revenue expenditure. The phenomenon of revenue deficit made its appearance during the latter 1970's.
Budgetary Deficit: Budgetary deficit is the excess of total expenditure of the government over its total receipts. Total expenditure includes both revenue expenditure and capital disbursements. Total receipts similarly include both revenue and capital receipts.
Budgetary Deficit = Total Expenditure - Total Receipts
= (Revenue Expenditure + Capital Expenditure) - (Revenue Receipts + Capital Receipts)
It was this concept of budgetary deficit that was understood as deficit financing in India
Fiscal Deficit: Fiscal deficit is the difference between total expenditure of the government and its total revenue receipts and capital receipts excluding the borrowings and other liabilities of the government. Altematively, fiscal deficit is the aggregate of budgetary deficit plus borrowings and other liabilities. Fiscal Deficit can be calculated as below:
Fiscal Deficit = Total Expenditure - Total Revenue Receipts - Capital Receipts excluding borrowings.
Primary Deficit: Primary deficit is the difference between fiscal deficit and interest payments. It is the aggregate of budgetary deficit plus borrowings and other liabilities minus interest payments.
It can be calculated as:
Primary Deficit = Fiscal Deficit - Interest Payments
Alternatively primary deficit can be evaluated as:
Primary Deficit = Budgetary Deficit + Borrowings and Other Liabilities - Interest Payments.
The primary deficit in the central government budget in India was of the magnitude of RS. 19,502 crore in 2000-0 1, which has increased to RS. 31,317 crore in 2001-2002.