Which of the following statements are correct?
I. Revenue deficit is Rs.20,000 crores.
II. Fiscal deficit is Rs.10,000 crores.
III. Primary deficit is Rs.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
Ans-d
Explanation
Revenue Deficit: The revenue deficit refers to the excess of government’s revenue expenditure over revenue receipts
Revenue deficit = Revenue expenditure – Revenue receipts (60000-80000cr )= 20000 crore
Hence statement 1 is correct
Fiscal Deficit: Fiscal deficit is the difference between the government’s total expenditure and its total receipts excluding borrowing
The fiscal deficit will have to be financed through borrowing. Thus, it indicates the total borrowing requirements of the government from all sources = Rs.10,000 crore
Hence statement 2 is correct
Primary Deficit: We must note that the borrowing requirement of the government includes interest obligations on accumulated debt. The goal of measuring primary deficit is to focus on present fiscal imbalances. To obtain an estimate of borrowing on account of current expenditures exceeding revenues, we need to calculate what has been called the primary deficit. It is simply the fiscal deficit minus the interest payments = Rs.10,000 crore – Rs.6000 crore = Rs.4,000 crore
Hence statement 3 is correct
Read: Previous Year UPSC Economy Questions (PYQs) With Explanation 2025