Match List-I with List-II:
| List-I | List-II | ||
|---|---|---|---|
| (A) | Revenue deficit | (I) | Total borrowing requirement of the government from all sources |
| (B) | Fiscal deficit | (II) | A large part of borrowing is used for consumption expenditure rather than investment |
| (C) | Primary deficit | (III) | The government is dissaving |
| (D) | A large share of revenue deficit in fiscal deficit | (IV) | Borrowing on account of current expenditures exceeding revenues, leaving out interest |
Choose the correct answer from the options given below:
Answer & explanation
Correct answer: option 4
The correct answer is Option (4) → (A) - (III), (B) - (I), (C) - (IV), (D) - (II)
Each deficit tells something different about the government’s borrowing.
| List-I | List-II | Reason |
|---|---|---|
| (A) Revenue deficit | (III) The government is dissaving | It borrows to meet part of its consumption spending, using up others’ savings. |
| (B) Fiscal deficit | (I) Total borrowing requirement of the government from all sources | The whole gap is met by borrowing, so it equals total borrowing. |
| (C) Primary deficit | (IV) Borrowing on account of current expenditures exceeding revenues, leaving out interest | It is fiscal deficit minus interest, so it shows present imbalance only. |
| (D) A large share of revenue deficit in fiscal deficit | (II) A large part of borrowing is used for consumption expenditure rather than investment | Much of the borrowing then pays for consumption, not assets. |
NCERT (2026-27): “5.2.1 Measures of Government Deficit … When the government incurs a revenue deficit, it implies that the government is dissaving and is using up the savings of the other sectors of the economy to finance a part of its consumption expenditure. …” “… The fiscal deficit will have to be financed through borrowing. Thus, it indicates the total borrowing requirements of the government from all sources. …” “… A large share of revenue deficit in fiscal deficit indicated that a large part of borrowing is being used to meet its consumption expenditure needs rather than investment.” “Primary Deficit: … 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” |