Borrowings in government budget shows ____________ deficit.
Answer & explanation
Correct answer: option 3
The correct answer is Option (3) → Fiscal
The fiscal deficit is total expenditure minus revenue receipts and non-debt capital receipts. This gap has to be met by borrowing, so the fiscal deficit shows the total borrowing requirement of the government from all sources.
Option (1) Primary — Incorrect. The primary deficit is the fiscal deficit minus interest payments. It shows how much the government borrows for spending other than interest on past loans.
Option (2) Revenue — Incorrect. The revenue deficit is the excess of revenue expenditure over revenue receipts. It is only a part of what the government borrows.
Option (3) Fiscal — Correct. The whole gap between spending and non-debt receipts is filled by borrowing, at home, from the RBI and from abroad.
Option (4) Secondary — Incorrect. There is no such term among the measures of government deficit.
NCERT (2026-27): “5.2.1 Measures of Government Deficit … Revenue Deficit: The revenue deficit refers to the excess of government’s revenue expenditure over revenue receipts… …Fiscal Deficit: Fiscal deficit is the difference between the government’s total expenditure and its total receipts excluding borrowing Gross fiscal deficit = Total expenditure – (Revenue receipts + Non-debt creating capital receipts)… …The fiscal deficit will have to be financed through borrowing. Thus, it indicates the total borrowing requirements of the government from all sources.… …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…” |