According to the data released by Ministry of commerce and industry, trade deficit has widened to $12.8 billion in July from $10.8 billion in June. Imports fell 10.3 per cent to $35.95 billion while exports came in at $23.1 billion.  India’s merchandise exports has contracted for the eighth month running in July, registering a 10.3 per cent drop over last year. In the April-July period, exports fell 15 per cent over last year. India’s exports were hurt because of a stronger currency, a problem that could worsen after the yuan devaluation.

A trade deficit is an economic condition that occurs when a country is importing more goods than it is exporting.

What is meant by Fiscal Deficit?

Fiscal deficit is a measure of how much the government needs to borrow from the market to meet its expenditure when its resources are inadequate.

Fiscal deficit = Total expenditure – Total receipts excluding borrowings = Borrowing

What is meant by Revenue Deficit?

Revenue deficit is excess of total revenue expenditure of the government over its total revenue receipts. It is related to only revenue expenditure and revenue receipts of the government.

Revenue deficit = Total Revenue expenditure – Total Revenue receipts

What is meant by Primary Deficit?

Primary deficit is defined as fiscal deficit of current year minus interest payments on previous borrowings. Primary deficit indicates borrowing requirement exclusive of interest payment.

Primary deficit = Fiscal deficit – Interest payments