Consider the following statements about how the items of the central government budget are worked out:
(A) Fiscal deficit = Total expenditure − Revenue receipts − Recovery of loans − Other receipts (mainly PSU disinvestment).
(B) Primary deficit = Fiscal deficit − Interest payments.
(C) Non-debt receipts = Revenue receipts + Recovery of loans + Other receipts (mainly PSU disinvestment).
(D) Revenue deficit = Capital receipts − Capital expenditure.
Choose the correct answer from the options given below:
Answer & explanation
Correct answer: option 1
The correct answer is Option (1) → (A), (B) and (C) only
In Table 5.1, item 1 is revenue receipts, 2 revenue expenditure, 2(a) interest, 4(a) recovery of loans, 4(b) other receipts (mainly PSU disinvestment) and 7 total expenditure.
(A) Fiscal deficit = Total expenditure − Revenue receipts − Recovery of loans − Other receipts (mainly PSU disinvestment). — Correct. Item 8 is [7 − 1 − 4(a) − 4(b)].
(B) Primary deficit = Fiscal deficit − Interest payments. — Correct. Item 9 is [8 − 2(a)].
(C) Non-debt receipts = Revenue receipts + Recovery of loans + Other receipts (mainly PSU disinvestment). — Correct. Item 6 is [1 + 4(a) + 4(b)].
(D) Revenue deficit = Capital receipts − Capital expenditure. — Incorrect. Item 3 is (2 − 1): revenue expenditure minus revenue receipts.
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” “Non-debt creating capital receipts are those receipts which are not borrowings and, therefore, do not give rise to debt. Examples are recovery of loans and the proceeds from the sale of PSUs. From Table 5.1 we can see that non-debt creating capital receipts equals 9.4 per cent of GDP, obtained by subtracting, borrowing and other liabilities from total capital receipts [1+4(a)+4(b)]. The fiscal deficit, therefore turn out to be 5.6 per cent of GDP. …” “8. Fiscal deficit [7-1-4(a)-4(b)] 5.6” “9. Primary Deficit [8–2(a)] 2.0” |