Suppose the revenue expenditure is Rs.80,000 crores and the revenue receipts of the Government are R

Question

Suppose the revenue expenditure is Rs.80,000 crores and the revenue receipts of the Government are Rs.60,000 crores. The Government budget also shows borrowings of Rs.10,000 crores and interest payments of Rs.6,000 crores. Which of the following statements are correct?Revenue deficit is Rs.20,000 crores.Fiscal deficit is Rs.10,000 crores.Primary deficit is Rs.4,000 crores.Select the correct answer using the code given below.

Accepted Answer

I. Revenue Deficit = Revenue Expenditure – Revenue Receipts = 80,000 – 60,000 = ₹20,000 crores. Option I is correct. II. Fiscal Deficit = Total Expenditure – (Revenue Receipts + Non-debt Capital Receipts) Here, borrowings = ₹10,000 crores → this indicates fiscal deficit is ₹10,000 crores. Option II is correct. III. Primary Deficit = Fiscal Deficit – Interest Payments = 10,000 – 6,000 = ₹4,000 crores Option III is correct.