If the government revenue expenditure exceeds revenue receipt, It is called:  

The correct answer is revenue deficit.

Key Points

• When a government's revenue expenditure exceeds revenue receipts, it is termed as a revenue deficit.
• Revenue expenditure refers to the day-to-day operational expenses incurred by the government, such as salaries, pensions, and interest payments on debt. Revenue receipts are the funds that the government receives from tax collections and other sources during the normal course of operations.
• A revenue deficit essentially means that the government's own earnings are insufficient to meet the operational costs of running government departments and provision of services.
• To cover this deficit, the government may need to borrow or sell assets, which could further affect its fiscal position. It may also hint at the possibility of structural economic imbalances.​

Additional Information

• Primary Deficit:
  • Primary deficit refers to the difference between the current year's fiscal deficit and interest payments on previous borrowings.
  • It shows how much of the government's expenses, other than interest payments, exceed revenue.
  • If the primary deficit is zero, it means that the current borrowings of the government are being used only for making interest payments.
• Capital Deficit:
  • This term is not as commonly recognized in economic parlance, especially in the context of government budgeting.
  • However, generally, a capital deficit could refer to a situation where a government's capital expenditures (money spent on acquiring or maintaining fixed assets like land, buildings, and equipment) exceed its capital receipts.
• Fiscal Deficit:
  • A fiscal deficit is the difference between the total income of the government (total taxes and non-debt capital receipts) and its total expenditure.
  • A fiscal deficit is regarded by some as a favourable economic policy, especially during times of slowdown or recession, as governments might invest in infrastructure to stimulate economic growth. However, sustained and large deficits can lead to serious problems, such as high-interest rates, inflation, and devaluation.
  • Fiscal deficit gives the signal that the government is undertaking borrowings to meet its expenditure, and it is a key economic indicator, closely watched by analysts and policymakers.