Practicing Success

Target Exam

CUET

Subject

Economics

Chapter

Macro Economics: Government Budget and Economy

Question:

From the following data about a Government budget, find out fiscal deficit:

Options:

₹45 crore

₹35 crore

₹25 crore

None of the above

Correct Answer:

₹35 crore

Explanation:

Total expenditure = Capital + Revenue
Total expenditure = 110 + 100 = ₹210 crores

Note: Interest payments of ₹10 crores are already included in revenue expenditure of ₹100 crores. Hence, not counted separately.

Total receipts = Capital receipts (net of borrowing) + Revenue receipts
Total receipts = Capital receipts (net of borrowing) + Tax Revenue receipts + Non tax revenue receipts
Total receipts = 95 + 60 +20 = ₹175 crores


Fiscal deficit =Total expenditure – Total receipts (excluding borrowings)
Fiscal deficit = 210 – 175 = ₹35 crores