Identify the correct formula :
(A) Gross Fiscal Deficit = Total Expenditure of the Government - (Revenue Receipts + Non-Debt Creating Capital Receipts)
(B) Gross Fiscal Deficit = Total Expenditure of the Government - Total Receipts
(C) Gross Fiscal Deficit = Gross Primary Deficit - Net Interest Liabilities
(D) Gross Fiscal Deficit = Net Borrowing at Home + Borrowing from RBI + Borrowing from abroad
(E) Gross Fiscal Deficit = Borrowing from RBI + Borrowing from ABroad
Choose the correct answer from the options given below :
Answer & explanation
Correct answer: option 1
The correct answer is option (1) : (A) and (D) only
Let's analyze each option to identify the correct formulae for Gross Fiscal Deficit:
(A) Gross Fiscal Deficit: Total Expenditure of the Government - (Revenue Receipts + Non-Debt Creating Capital Receipts): This formula does correctly represent the Gross Fiscal Deficit and it , it indicates the total borrowing requirements of the government from all sources.
(D) Gross Fiscal Deficit = Net Borrowing at Home + Borrowing from RBI + Borrowing from Abroad
This formula does correctly represent the Gross Fiscal Deficit and it , it indicates Gross Fiscal Deficit financing side.
Therefore, the correct answer is (3) (C) and (D) Only.