CSEET · Economic and Business Environment · Indian Union Budget
A government's total expenditure is Rs 48 lakh crore, its non-debt capital receipts are Rs 1 lakh crore and its revenue receipts are Rs 30 lakh crore. Its tax and other revenue are included in revenue receipts. What is its fiscal deficit (total receipts excluding borrowings)?
The fiscal deficit is Rs 17 lakh crore. It equals total expenditure of Rs 48 lakh crore minus revenue receipts of Rs 30 lakh crore and non-debt capital receipts of Rs 1 lakh crore, which together are Rs 31 lakh crore. This gap must be met by borrowing.
- ARs 17 lakh croreCorrect
- BRs 18 lakh crore
- CRs 16 lakh crore
- DRs 19 lakh crore
Explanation
Fiscal deficit = total expenditure - (revenue receipts + non-debt capital receipts) = 48 - (30 + 1) = 17 lakh crore. Rs 18 lakh crore results from ignoring the non-debt capital receipts. Rs 16 lakh crore adds them twice, and Rs 19 lakh crore wrongly adds them to expenditure.
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