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There are certain times when the govt. cannot self-finance entirely with its own budgets. Their revenue always can't fulfill the demand. In such cases, the sole way left is borrowing money from another source. Sources like local investors. Local investors help the government with cash after they require liquid cash. Now, understand debt from our Budget Deficit and Public Debt assignment help online.
When the public or the local investor lends money to the govt., then it's called debt. Debt can have various sources.
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Three types of Budget Deficit are Revenue deficit, Fiscal deficit, and Primary Deficit.
Revenue Deficit- Revenue deficit occurs when the government revenue generation is less than the revenue expenditure. Or you can say that when government earns less and spends more. Examples of government revenue are tax revenue and non-tax revenue. Revenue deficit is measured by substracting revenue receipt from revenue expenditure.
Fiscal Deficit & Fiscal deficit covers the amount that the government needs to borrow to cover its total expenses. A large deficit means a large number of expenses. It measures the difference between total budget expenditure and total budget revenue.
Primary Deficit & It is the same as a Fiscal deficit with the only difference that it does not include interest on the borrowing of the previous year. If the primary deficit is zero, it means the government has to borrow from the market to make its interest payment.
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