Consider the following budget scenario in an economy for the year. Budget EstimatesTax Revenue (net to Centre)215650Recoveries of Loans20900Non-tax revenue84350Borrowings and other Liabilities179100Total Receipts500000Expenditure on Revenue Account345000Of which Interest payments20000Total expenditure On Capital Account135000Total Expenditure500000 Calculate :1. Revenue Deficit2. Fiscal Deficit3. Primary deficit b. Explain in brief the impact of the following:The government of India decides to finance the widening fiscal deficit by raising more debt from the private institutions/individuals . What is this impact known as ? Explain.

Government makes expenditure and raises fund through various means. When government expenditure is…

Answered: Consider the following budget scenario…

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Consider the following budget scenario in an economy for the year.

	Budget Estimates
Tax Revenue (net to Centre)	215650
Recoveries of Loans	20900
Non-tax revenue	84350
Borrowings and other Liabilities	179100
Total Receipts	500000
Expenditure on Revenue Account	345000
Of which Interest payments	20000
Total expenditure On Capital Account	135000
Total Expenditure	500000

Calculate :

1. Revenue Deficit

2. Fiscal Deficit

3. Primary deficit

b. Explain in brief the impact of the following:

The government of India decides to finance the widening fiscal deficit by raising more debt from the private institutions/individuals . What is this impact known as ? Explain.

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