1. Revenue Deficit refers to the Excess of Total Revenue Expenditures over Total Revenue Receipts.

Revenue Deficit = Total Revenue Expenditures - Total Revenue Receipts.
It signifies that government will not be able to meet its revenue expenditures fully from its revenue receipts. It indicates that the Government has to make up for this shortfall from capital receipts, which will increase the liability or decrease the assets of the Government.

2. Fiscal Deficit refers to the Excess of Total Expenditures over the Sum of Revenue Receipts and Capital Receipts excluding Borrowings.

Fiscal Deficit = Revenue Expenditure + Capital Expenditure - Revenue Receipts - Capital Receipts (Excluding Borrowings)
Fiscal Deficit indicates borrowing requirements of the Government during the budget year. Borrowings may create the problem for the Government and the economy. It increases the future liability of the Government in two ways:

1. Government has to repay loans in the coming year.
2. It has to pay interest on these loans also.

3. Primary Deficit is the difference between Fiscal Deficit and Interest Payments.

Primary Deficit = Fiscal Deficit - Interest Payment.
Primary Deficit is that part of Fiscal Deficit which indicates borrowing requirements to make up Short fall in Receipts on accounts of Expenditure other than the Interest Payments.