Practicing Success
Read the following statements - Assertion (A) and Reason (R)carefully and choose the correct alternative given below: Assertion (A) :Fiscal deficit in a government budget can emerge without a revenue deficit. Reason (R ):Fiscal deficit without a revenue deficit is possible when revenue budget is balanced and capital budget shows a deficit . |
Both Assertion (A) and Reason (R ) are true and Reason(R) is the correct explanation of Assertion (A) Both Assertion (A) and Reason (R ) are true and Reason(R) is not the correct explanation of Assertion (A) Assertion (A) is true but Reason (R ) is false Assertion (A) is false but Reason (R ) is true |
Both Assertion (A) and Reason (R ) are true and Reason(R) is the correct explanation of Assertion (A) |
There can be a fiscal deficit in government budget without any revenue deficit. Revenue deficit is a position where total revenue expenditure of the government exceeds its total revenue receipts. Fiscal deficit is a position where total expenditure of the government exceeds sum total of its revenue receipts and non-debt capital receipts. Hence there can be a fiscal deficit without revenue deficit in following situations: i When capital budget shows a deficit and revenue budget is balanced. ii When deficit in capital budget is greater than surplus in revenue budget. |