When revenue receipts are less than the revenue expenditure in government budget, this shortfall of receipts is known as revenue deficit.

Implications of revenue deficit are:

(i)High revenue deficit shows accumulated and recurring expenses of government on repayment expenses of government on repayment of loans,expenses on defence, etc.

(ii)The revenue deficit is managed by borrowings or disinvestment.Hence, High revenue deficit either increases government liabilities or causes reduction in government assets.

(iii) High revenue deficit leads to inflationary situation in the economy, as high government expenditure increases the Aggregate Demand of the economy. 

(iv)High revenue deficit implies high future burden of loan and interest payments on government.

Revenue deficit When the revenue receipts are less than the revenue expenditures in government budget,this shortfall of receipts is known as revenue deficit.

Revenue deficit=Revenue Expenditure-Revenue Receipts

The main implications of revenue deficit are:

(i) High revenue deficit leads to inflationary situation in the economy.

(ii)High revenue deficit implies high future burden of loan and interest payments on government.

Fiscal deficit It is the excess of the total expenditure,i.e. revenue and capital expenditure,i.e.,Over the total receipts (excluding borrowings).

Fiscal Deficit= Total Budget Expenditure -Total Budget Receipts (excluding borrowings) 

Fiscal deficit indicates the following situations in an economy:

(i)High borrowing requirements of government.

(ii)High interest  paymets of government.

(iii) Increased foreign dependence of the economy.

(i) Corporation tax is a direct tax paid by the companies on their profit earned. Here the liability to pay and the burden falls on the same entity i.e. the given Company which earns the profit.
(ii) Sales tax is an indirect tax. The liability to pay it is on the seller but he passes on the burden to the buyer of the product. Thus it is an indirect tax because the liability to pay and the burden falls on different entities.
(iii) Wealth tax is a direct tax, as it is directly levied on the wealth of a person. Thus the liability to pay and the burden of the tax falls on the same person, who thereby pays it.
(iv) Service Tax is an indirect tax, It is a tax levied on sale of certain services. It is indirect tax because the liability to pay and the incidence (burden) of this tax falls on different entities.

Disinvestment refers to reducing the holdings of the government in public sector undertaking in part or in full. e.g. The Government of India is undertaking disinvestment by selling its shares in the Maruti Udyog. It is a capital receipt of the government, as it reduces assets of the government.

(i) Tax receipt (ii) Disinvestment

(i) Tax receipt it is a revenue receipt because it does not create a liability for the government or does not lead to reduction in any asset.

(ii) Disinvestment It refers to withdrawal of existing investment.e.g. the Government of India is undertaking disinvestment by selling its shares in the Maruti Udyog.It is a capital receipt of the government,as it reduces  assets of the government

Budget is a comprehensive statement of the expected receipts and expenditure of the government during a financial year (1st April to 31st march)..

 Following are the principal objectives that the government pursues trough the budget:

(i) Reallocation of resources The government,through its budgetary policy reallocate resources, so that social and economic objectives can be met.

(ii) Redistribution of income and wealth Government through facial tools of taxation and transfer payment brings fair distribution of income.Equitable distribution of income and wealth is a way to bring social justice.

(iii) Economic stability The government tries to prevent business fluctuations and maintain price and employment stability. Economic stability stimulates inducement to invest and increases to invest and increases the rate of growth and development.

(iv) Economic growth The growth rate of a country depends on the rate of savings and investment.Therefore the roles that are assigned to budgetary policy in this regard are to create  conditions for increase in savings and investment.

Budget is a comprehensive statement of the expected receipts and expenditure of the government during a financial year (1st April to 31st march)..

 Following are the principal objectives that the government pursues trough the budget:

(i) Reallocation of resources The government,through its budgetary policy reallocate resources, so that social and economic objectives can be met.

(ii) Redistribution of income and wealth Government through facial tools of taxation and transfer payment brings fair distribution of income.Equitable distribution of income and wealth is a way to bring social justice.

(iii) Economic stability The government tries to prevent business fluctuations and maintain price and employment stability. Economic stability stimulates inducement to invest and increases to invest and increases the rate of growth and development.

(iv) Economic growth The growth rate of a country depends on the rate of savings and investment.Therefore the roles that are assigned to budgetary policy in this regard are to create  conditions for increase in savings and investment.

Balanced budget when the  estimated receipts are equal to the estimated expenditure in government budget, it is termed as a balanced budget

 Surplus budget when the estimated receipts are more than the estimated expenditure in government budget, it is termed as a surplus budget. 

public goods such as parks,roads, water supply, bridges,national defence, etc are the goods which people urgently need for the day-to-day living,but market mechanism cannot produce these goods in sufficient quantities, due to its features of sufficient quantities, due to its features of non-rivalrous and non-excludable in consumption.Therefore,these goods need to be provided by the government.