Question

Why Should Revenue Deficit be Curbed?

Answer 1

Revenue Deficit often occurs when unproductive expenditure of the government (like Expenditure on subsidies and purchases relating to law and order and defence of the country) is in excess of the tax and non-tax revenue receipts. Thus, it contributes to fiscal deficit compels the government to resort to borrowing or disadvantage. Borrowing leads to a rise in National Debt. 

Disinvestment leads to transfer welfare of asset ownership from the public sector to private sector. It implies a shift in focus from social welfare to profit maximization. Thus, we conclude that revenue Deficit should be curbed.