This ppt contains
Budget
Fiscal Imbalance
Deficit
Deficit Financing
Harshit Jalan
Adverse Effect of Deficit Financing
Need
Is deficit financing inflationary
objectives of fiscal policy
,
to accelerate the rate of economic growth:
,
optimum allocation of resources
,
generally following are the objectives of a fiscal
,
equitable distribution of income and wealth:
,
full employment
,
to encourage investment
,
economic stability:
objectives of fiscal policy
,
to accelerate the rate of economic growth:
,
optimum allocation of resources
,
generally following are the objectives of a fiscal
,
equitable distribution of income and wealth:
,
full employment
,
to encourage investment
,
economic stability:
This presentation discusses about the following subtopics:
What is a government deficit?
Types of deficit
What is a revenue deficit?
What is a fiscal deficit?
What is a primary deficit?
Difference between Fiscal Deficit and Revenue Deficit
Difference between Primary Deficit and Revenue Deficit
This presentation discusses about the following subtopics:
What is a government deficit?
Types of deficit
What is a revenue deficit?
What is a fiscal deficit?
What is a primary deficit?
Difference between Fiscal Deficit and Revenue Deficit
Difference between Primary Deficit and Revenue Deficit
Contents:
1. What is Fiscal Policy?
2. Instruments of Fiscal Policy
3. Measures
4. Role in development of the Economy
5. What is Budget?
6. Revenue Receipts
7. Capital Receipts
8. Capital Expenditure
9. Budget Surplus
10. Budget Deficits
11. Balanced Budget
Inflation is defined as a sustained increase in the general level of prices for goods and services. It is measured as an annual percentage increase. As inflation rises, every dollar you own buys a smaller percentage of a good or service.
A study on Budget deficit AND Its impact on the economy of BangladeshMd Showeb
Government budget deficit is the difference between government revenues and expenditures. Government has different sources of revenues. Major portion of government revenues comes from direct and indirect taxes. Direct taxes come from income and profits of individuals and institutions and indirect taxes come from import duty, supplementary duty and value added tax. It can be put in different way. Direct taxes are the part of economic revenues and incomes of individuals and institutions and indirect taxes are the part of economic transactions in the form of buy, sale, export and import transactions. If government wants accelerate its revenues to meet the growing public expenditures and to reduce the budget deficit without reducing the expenditures of different influential sectors, much efforts should be made to increase economic revenues and income as well as the economic transactions so that the government revenues can meet the growing demand of the economy with the increase in revenues from income tax, import duty, supplementary duty and value added tax. In this regard the concentration of the report is on the management of deficit budget to minimize bad effects and maximize the utilization of funds. Having budget deficit is not a problem at all. The problems lie with the government inefficiency in the management of budget deficit. The evaluation of different reasons behind deficit budget and the evaluation of different bad effects of deficit budget are two crucial parts of our discussion. The impact of budget deficit on the different sectors of the economy is addressed here with relevant information. It is further concentration point of the report to find ways to improve the management performance of the government to achieve different macroeconomic goals with the help of expansion of economic revenues and transactions. The government revenues increase with the increase in economic revenues and economic transactions. The key point of our discussion is government should not decrease the public expenditures as the population is growing. The expenditures on different public sectors have to be increased as the population is growing. But budget deficit should not grow to meet the expenditures as budget deficit has some associated problems with it. For this reason government has to concentrate on accelerating the revenue collection rapidly with the expansion of economic revenues and economic transactions. For this reason government should try to integrate different policies to achieve key macroeconomic goals.
Fiscal policy is related to income and expenditure of government. It refers to budgetary policy of government. It is also known as Income and Expenditure Policy or Tax and Expenditure Policy of government. The fiscal policy is of great importance for both developed and developing countries.
Similar to Fiscal Imbalance and Deficit Financing (20)
What price will pi network be listed on exchangesDOT TECH
The rate at which pi will be listed is practically unknown. But due to speculations surrounding it the predicted rate is tends to be from 30$ — 50$.
So if you are interested in selling your pi network coins at a high rate tho. Or you can't wait till the mainnet launch in 2026. You can easily trade your pi coins with a merchant.
A merchant is someone who buys pi coins from miners and resell them to Investors looking forward to hold massive quantities till mainnet launch.
I will leave the telegram contact of my personal pi vendor to trade with.
@Pi_vendor_247
Resume
• Real GDP growth slowed down due to problems with access to electricity caused by the destruction of manoeuvrable electricity generation by Russian drones and missiles.
• Exports and imports continued growing due to better logistics through the Ukrainian sea corridor and road. Polish farmers and drivers stopped blocking borders at the end of April.
• In April, both the Tax and Customs Services over-executed the revenue plan. Moreover, the NBU transferred twice the planned profit to the budget.
• The European side approved the Ukraine Plan, which the government adopted to determine indicators for the Ukraine Facility. That approval will allow Ukraine to receive a EUR 1.9 bn loan from the EU in May. At the same time, the EU provided Ukraine with a EUR 1.5 bn loan in April, as the government fulfilled five indicators under the Ukraine Plan.
• The USA has finally approved an aid package for Ukraine, which includes USD 7.8 bn of budget support; however, the conditions and timing of the assistance are still unknown.
• As in March, annual consumer inflation amounted to 3.2% yoy in April.
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The secret way to sell pi coins effortlessly.DOT TECH
Well as we all know pi isn't launched yet. But you can still sell your pi coins effortlessly because some whales in China are interested in holding massive pi coins. And they are willing to pay good money for it. If you are interested in selling I will leave a contact for you. Just telegram this number below. I sold about 3000 pi coins to him and he paid me immediately.
Telegram: @Pi_vendor_247
what is the best method to sell pi coins in 2024DOT TECH
The best way to sell your pi coins safely is trading with an exchange..but since pi is not launched in any exchange, and second option is through a VERIFIED pi merchant.
Who is a pi merchant?
A pi merchant is someone who buys pi coins from miners and pioneers and resell them to Investors looking forward to hold massive amounts before mainnet launch in 2026.
I will leave the telegram contact of my personal pi merchant to trade pi coins with.
@Pi_vendor_247
what is the future of Pi Network currency.DOT TECH
The future of the Pi cryptocurrency is uncertain, and its success will depend on several factors. Pi is a relatively new cryptocurrency that aims to be user-friendly and accessible to a wide audience. Here are a few key considerations for its future:
Message: @Pi_vendor_247 on telegram if u want to sell PI COINS.
1. Mainnet Launch: As of my last knowledge update in January 2022, Pi was still in the testnet phase. Its success will depend on a successful transition to a mainnet, where actual transactions can take place.
2. User Adoption: Pi's success will be closely tied to user adoption. The more users who join the network and actively participate, the stronger the ecosystem can become.
3. Utility and Use Cases: For a cryptocurrency to thrive, it must offer utility and practical use cases. The Pi team has talked about various applications, including peer-to-peer transactions, smart contracts, and more. The development and implementation of these features will be essential.
4. Regulatory Environment: The regulatory environment for cryptocurrencies is evolving globally. How Pi navigates and complies with regulations in various jurisdictions will significantly impact its future.
5. Technology Development: The Pi network must continue to develop and improve its technology, security, and scalability to compete with established cryptocurrencies.
6. Community Engagement: The Pi community plays a critical role in its future. Engaged users can help build trust and grow the network.
7. Monetization and Sustainability: The Pi team's monetization strategy, such as fees, partnerships, or other revenue sources, will affect its long-term sustainability.
It's essential to approach Pi or any new cryptocurrency with caution and conduct due diligence. Cryptocurrency investments involve risks, and potential rewards can be uncertain. The success and future of Pi will depend on the collective efforts of its team, community, and the broader cryptocurrency market dynamics. It's advisable to stay updated on Pi's development and follow any updates from the official Pi Network website or announcements from the team.
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how to sell pi coins on Bitmart crypto exchangeDOT TECH
Yes. Pi network coins can be exchanged but not on bitmart exchange. Because pi network is still in the enclosed mainnet. The only way pioneers are able to trade pi coins is by reselling the pi coins to pi verified merchants.
A verified merchant is someone who buys pi network coins and resell it to exchanges looking forward to hold till mainnet launch.
I will leave the telegram contact of my personal pi merchant to trade with.
@Pi_vendor_247
If you are looking for a pi coin investor. Then look no further because I have the right one he is a pi vendor (he buy and resell to whales in China). I met him on a crypto conference and ever since I and my friends have sold more than 10k pi coins to him And he bought all and still want more. I will drop his telegram handle below just send him a message.
@Pi_vendor_247
Currently pi network is not tradable on binance or any other exchange because we are still in the enclosed mainnet.
Right now the only way to sell pi coins is by trading with a verified merchant.
What is a pi merchant?
A pi merchant is someone verified by pi network team and allowed to barter pi coins for goods and services.
Since pi network is not doing any pre-sale The only way exchanges like binance/huobi or crypto whales can get pi is by buying from miners. And a merchant stands in between the exchanges and the miners.
I will leave the telegram contact of my personal pi merchant. I and my friends has traded more than 6000pi coins successfully
Tele-gram
@Pi_vendor_247
when will pi network coin be available on crypto exchange.DOT TECH
There is no set date for when Pi coins will enter the market.
However, the developers are working hard to get them released as soon as possible.
Once they are available, users will be able to exchange other cryptocurrencies for Pi coins on designated exchanges.
But for now the only way to sell your pi coins is through verified pi vendor.
Here is the telegram contact of my personal pi vendor
@Pi_vendor_247
Even tho Pi network is not listed on any exchange yet.
Buying/Selling or investing in pi network coins is highly possible through the help of vendors. You can buy from vendors[ buy directly from the pi network miners and resell it]. I will leave the telegram contact of my personal vendor.
@Pi_vendor_247
2. Budget and Budget Balance (BBB)
A government budget is a financial statement
presenting the government’s proposed revenues and
spending for a financial year.
Budget balance refers to the difference between total
revenues and total expenditure of a government.
Surplus: TR > TE
Deficit : TR < TE
3. Fiscal Imbalance
Fiscal Imbalance refers to a situation when
the total expenditure of the government
and total receipts (excluding borrowing) are
not equal.
There can be two situations:
Fiscal Deficit
Fiscal Surplus
5. Fiscal Deficit as a percentage of GDP
GDP is the market value of all final goods
and services produced in a country in a year.
The GDP number includes both government
spending and private consumption of goods
and services.
7. Elements of Fiscal Deficit
Revenue Deficit
Revenue Deficit refers to
difference between revenue
expenditure and revenue
receipts.
This does not contains those
expenditure and receipts
which effects liabilities and
capital.
Capital Expenditure
Capital expenditure is the amount
a company spends on buying
fixed assets, other than as part
of acquisitions.
Capital expenditure is made by
the establishment to
consistently maintain the
operational activities.
8.
9. Capital Expenditure of Centre in India
Particula
rs
2006-
07
2007-
08
2008-
09
2009-
10
2010-
11
2011-
12
A. NON
DEVELOPMETAL
EXPENDITURE
36690.69 41819 47379.08 62383.11 70106.40 90132.17
B.DEVELOP
METAL
EXPENDITU
RE
22602.49 65122.14 30110.85 38302.33 66990.08 62051.95
C. LOANS
AND
EXPENDITU
RE
8672.22 1385.55 6747.62 7034.35 16801.46 2130.22
)
67965.4 108326.6
9
84237.55 107719.79 153897.9
4
154314.3
4
10. Causes of Fiscal Deficit
Payment of Interest
Poor Performance of Public Sector
Excessive Government Borrowing
Tax Evasion
Increase in Subsidies
Defense Expenditure
11. Causes
Payment of Interest
One of the major components of
government expenditure is the
interest payment both on
domestic loans and foreign
loans. The government debt
has increased considerably
over the years. This has
resulted in increased interest
burden on the government
Poor Performance of Public
Sector
• Political interference
• Inefficiency and corruption
of management
• Lack of professionalism
• Surplus staff
12. Causes
Excessive Government
borrowings
The internal and external debt
of the government has
increased considerably
during the past few
decades. Due to the debts;
the government has to incur
high expenditure in form of
interest payments.
Tax Evasion
Indian tax system is made up
of complex procedures with
numerous exemptions.
Corruptions is rampant at all
levels, which leads to the
fiscal imbalance.
13. Causes
Increase in Subsidies
The major subsidies provided
by the Central Government
of India have increased over
the years resulting in fiscal
imbalance period .
Defense Expenditure
The government has limited
scope to reduce defense
budget due to security
problems across the Indian
borders.
14. Consequences
Debt. Trap
Cut in Capital Expenditure
No increase in expenditure on health and Education
High interest rates
Leads to inflation
Discourages foreign investment
Extra burden of Interest Payment
16. Fiscal Policy to control deficit
The fiscal policy is concerned with the raising of government revenue
and incurring of government expenditure.
To generate revenue and to incur expenditure, the government frames
a policy called budgetary policy or fiscal policy. So, the fiscal policy is
concerned with government expenditure and government revenue.
Fiscal policy deals with the taxation and expenditure decisions of the
government. Fiscal policy is composed of several parts.
These include, tax policy, expenditure policy, investment or
disinvestment strategies and debt or surplus management.
Fiscal policy is an important constituent of the overall economic
framework of a country.
17. Deficit Financing
Deficit financing is defined as financing the budgetary
deficit through public loans.
Deficit financing is an approach to money
management that involves spending more money
than is collected during the same period
18. Objectives of Deficit Financing
• To finance war.
• Economic development.
• Mobilization of resources.
• To granting subsidies.
• To increase in aggregate demand.
• For payment of interest.
19. Objectives
To Finance War
Deficit financing has generally
being used as a method of
financing war expenditure.
During the war time through
normal methods of raising
resources. It becomes difficult
to mobilize adequate
resources. Therefore
government has to adopt
deficit financing.
Economic Development
The main objective of deficit
financing in an under
developed country like India is
to promote economic
development The use of
deficit financing in fact
becomes essential for
financing the development
plan especially in
underdeveloped countries.
20. Objectives
Mobilization of resources
Deficit financing is also used
for the mobilization of
surplus, ideal and unutilized
resources in the country
For granting subsidies
In a country like India
government grants subsidies
to the producers to encourage
them to produce a particular
type of commodity, granting
subsidies is a very costly affair
which we cannot meet with
the regular income this deficit
financing becomes must for it.
21. Objectives
To increase aggregate demand
Deficit financing loads to increase
in aggregate demand through
increased public expenditure.
This increase the income and
purchasing power of the
people as a consequence
there is an increase availability
of goods and services and the
production and employment
level also increase.
Payment of Loans
Loan which are taken by the govt.
are supposed to be repaid
with their interest for that
government needs money
deficit financing is an
important tool to get the
income for the repayment of
loan along with the interest.
22. Adverse effect of deficit financing
• Leads to inflation.
• Adverse effect on saving.
• Inequality.
• Adverse effect on investment.
• Problem of balance of payment.
• Change in pattern of investment.
23. Effects
Leads to inflation
Deficit financing may lead to
inflation. Due to deficit
financing money supply
increases & the purchasing
power of the people also
increase which increases
the aggregate demand and
the prices also increase.
Adverse effect on savings
Deficit financing leads to
inflation and inflation
affects the habit of
voluntary saving adversely.
Infect it is not possible for
the people to maintain the
previous rate of saving in
the state of rising prices.
24. Effects
Inequality
In case of deficit financing income
distribution becomes unequal.
During deficit financing
deflationary pressure can be seen
on the economy which make the
rich richer and the poor, poorer.
The fix wage earners are badly
effected and their standard of
living detoriates thus no gap b/w
rich & poor increases.
Adverse effect on Investment
Deficit financing effects investment
adversely when there is inflation
in the economy trade unions
make demand for higher wages
for that they go for strikes and
lock outs which decreases the
efficiency of Labor and creates
uncertainty in the business which
a decreases the level of
investment of the country.
25. Effects
Problem in BOP
Deficit financing leads to inflation. A
high price level as compared to
other countries will make the
exports more expensive and thus
they start declining. On the other
hand rise in domestic income and
price may encourage people to
import more commodities from
abroad. This will create a deficit
in balance of payment and the
balance of payment will become
unfavorable.
Change in pattern of investment
Deficit financing leads to
inflation. During inflation
prices rise and reach to a
very high level in that case
people instead of indulging
into productive activities
they start doing speculative
activities.
26. Limitations of Deficit Financing
• Deficit financing is inevitable
under planned economic
development to activate
unutilized resources or step
up tempo of economic
process.
• It is necessary to the extent
it can promote capital
formation and economic
development.
29. Is deficit financing inflationary??????
Deficit financing may not necessarily be inflationary there are certain
conditions under which deficit financing may not lead to inflation. With
increase in money supply due to deficit financing prices do rise but rise
in price will only be temporary for about a period. As flow of goods and
services increase prices will began to fall. deficit financing is an
important device for financing development plans for underdeveloped
countries and accelerate their rate of economic development. But If
deficit financing is not kept with in limits It may give rise to prices,
distorted investment and unequal and unjust distribution of income.
therefore it is essential that deficit financing is kept within limits and its
impact on prices and costs are softened through various controls.