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CMA Final · Corporate Financial Reporting · Government Accounting in India

A State has the following figures for a year (₹ crore): Revenue receipts 8,000; Recoveries of loans 300; Other non-debt capital receipts 200; Revenue expenditure 9,100; Capital expenditure 1,400. Fiscal deficit is computed as total expenditure minus revenue receipts minus non-debt capital receipts. What are the revenue deficit and fiscal deficit?

Revenue deficit is 9,100 minus 8,000, which is ₹1,100 crore. Total expenditure is 10,500 and non-debt receipts are 8,500, including loan recoveries and other capital receipts, so the fiscal deficit is ₹2,000 crore.

  1. ARevenue deficit 1,100; fiscal deficit 2,000Correct
  2. BRevenue deficit 1,100; fiscal deficit 2,500
  3. CRevenue deficit 1,400; fiscal deficit 2,000
  4. DRevenue deficit 1,100; fiscal deficit 1,700

Explanation

Revenue deficit = 9,100 − 8,000 = 1,100. Total expenditure = 9,100 + 1,400 = 10,500. Non-debt receipts = 8,000 + 300 + 200 = 8,500. Fiscal deficit = 10,500 − 8,500 = 2,000. The 2,500 option ignores the non-debt capital receipts, while 1,700 deducts loan recoveries twice.

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