Suppose the revenue expenditure is ₹80,000 crores and the revenue receipts of the Government are ₹60,000 crores. The Government budget also shows borrowings of ₹10,000 crores and interest payments of ₹6,000 crores. Which of the following statements are correct?
- 1.Revenue deficit is ₹20,000 crores.
- 2.Fiscal deficit is ₹10,000 crores.
- 3.Primary deficit is ₹4,000 crores.
Select the correct answer using the code given below:
- A.I and II only
- B.II and III only
- C.I and III only
- D.I, II and III
▶ Answer & Explanation
Correct answer: D. I, II and III
The revenue deficit is calculated as Revenue Expenditure minus Revenue Receipts (₹80,000 - ₹60,000 = ₹20,000 crores), which is correct. The fiscal deficit is the sum of the revenue deficit and the government's capital expenditure (excluding borrowings), or more simply, total expenditure minus total receipts (excluding borrowings). Given borrowings of ₹10,000 crores, if this represents the entire fiscal deficit, then capital expenditure net of receipts would be zero, which is unlikely but consistent with the data provided if we consider fiscal deficit as total borrowings plus other deficit financing. A more direct calculation from the provided numbers would be: Revenue Deficit + Capital Expenditure - Non-Debt Creating Capital Receipts = Fiscal Deficit. If we assume the ₹10,000 crores in borrowings *is* the fiscal deficit, then statement 2 is correct. The primary deficit is the fiscal deficit minus interest payments (₹10,000 - ₹6,000 = ₹4,000 crores), making statement 3 correct as well.
Source: UPSC gs1 2025