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

ECON MACRO
5th Edition
ISBN:9781337000529
Author:William A. McEachern
Publisher:William A. McEachern
Chapter11: Fiscal Policy
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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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