Suppose the revenue expenditure is USD 80,000 crores and the revenue receipts of the Government are USD 60…

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

Solution

Revenue deficit = Revenue expenditure - Revenue receipts = 80,000 - 60,000 = 20,000 crores (I correct). Fiscal deficit equals borrowings = 10,000 crores (II correct). Primary deficit = Fiscal deficit - Interest payments = 10,000 - 6,000 = 4,000 crores (III correct). [Note: question uses Indian Rupees (Rs); the dollar token in text is a formatting placeholder.]

Asked in: UPSC Prelims 2025

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