Revenue Deficit
The excess of the government's revenue expenditure over its revenue receipts.
Formula
Revenue Deficit = Revenue Expenditure - Revenue Receipts
Unit
%
In depth
The distinction from the fiscal deficit is what the borrowing funds: a revenue deficit means the government is borrowing to meet running costs such as salaries, interest and subsidies, which creates no asset and no future capacity to repay. Borrowing for capital expenditure builds something that may generate returns; borrowing for revenue expenditure does not. A high revenue deficit within a given fiscal deficit is therefore a worse position than a low one, and the ratio between them is a quality measure for public finances. Effective revenue deficit, which excludes grants for capital creation, is the further refinement India reports.
Worked example
A fiscal deficit of 4.9% of GDP with a revenue deficit of 1.9% means three-fifths of the borrowing funded capital spending. The same fiscal deficit with a 4.0% revenue deficit would fund almost nothing that lasts.
Illustrative figures, chosen so the arithmetic is easy to follow. Not a live price and not a valuation of any company.
Educational reference only
This entry explains what “Revenue Deficit” means. It is not investment advice and not a recommendation to buy or sell any security. Any numbers above are illustrative, not live prices, and nothing here predicts price direction or rates a stock. Consider your own circumstances and consult a SEBI-registered investment adviser before acting.