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Revenue Deficit
The revenue deficit is the gap between revenue expenditure, such as salaries, pensions, interest and subsidies, and revenue receipts, mainly taxes. Unlike the fiscal deficit, it excludes capital spending on assets.
Why It Matters
Borrowing to pay salaries is worse than borrowing to build roads, and the revenue deficit shows how much of the first is happening.
In India
A government that runs a revenue deficit is borrowing partly to fund consumption rather than investment.
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