Revenue Deficit is the excess of revenue expenditure over revenue receipts. It shows the deficit of the government on the current account.
Revenue deficit is an important indicator in the budget of the government to show the health of the budget. RD is the root fiscal problem. It indicates the use of borrowings (capital receipts) to run government’s day to day expenditure or technically, the current expenditure. Elimination of RD is a big step towards fiscal consolidation.
