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CMA Final · Corporate Financial Reporting · Government Accounting in India

A State Government's revenue receipts are ₹9,000 crore and revenue expenditure is ₹10,200 crore. Its capital receipts other than borrowings (recoveries of loans and disinvestment) are ₹400 crore, and capital expenditure including loans and advances is ₹2,100 crore. Interest payments, included in revenue expenditure, are ₹1,500 crore. What are the revenue deficit, fiscal deficit and primary deficit respectively?

Revenue deficit is 10,200 minus 9,000, which is ₹1,200 crore. Fiscal deficit is total expenditure of 12,300 less non-debt receipts of 9,400, giving ₹2,900 crore. Primary deficit is fiscal deficit less interest of 1,500, giving ₹1,400 crore.

  1. A₹1,200 crore; ₹2,900 crore; ₹1,400 croreCorrect
  2. B₹1,200 crore; ₹2,900 crore; ₹4,400 crore
  3. C₹1,200 crore; ₹2,500 crore; ₹1,000 crore
  4. D₹1,700 crore; ₹2,900 crore; ₹1,400 crore

Explanation

Revenue deficit = 10,200 - 9,000 = 1,200. Fiscal deficit = total expenditure (10,200 + 2,100 = 12,300) less revenue receipts and non-debt capital receipts (9,000 + 400 = 9,400) = 2,900. Primary deficit = 2,900 - 1,500 = 1,400. Option B adds interest instead of subtracting; option C forgets the 400 adjustment wrongly.

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