Revenue deficit refers to excess of revenue expenditure over revenue receipts during the given fiscal year.
Implications-
1. Revenue deficit indicates the inability of the government to meet the expenditure on routine functioning of the economy.
2. It implies dissavings on government account.
3.It implies that government has to make up this deficit by disturbing its capital budget.
4. Use of capital receipts may lead to inflationary situation in the economy.
5. Higher borrowings would increase the future burden to repay the loan amount and interest payment.
