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CMA Final · Corporate Financial Reporting · Government Accounting in India

A Union ministry's records show the following for a year (Rs crore): tax revenue 5,000; non-tax revenue 800; revenue expenditure 6,500; recoveries of loans 200; other non-debt capital receipts 100; capital expenditure 1,300. Using the standard definitions, what is the fiscal deficit?

Fiscal deficit is total expenditure minus non-debt receipts. Expenditure is 7,800 crore and non-debt receipts including loan recoveries and other capital receipts are 6,100 crore, so the fiscal deficit is Rs 1,700 crore.

  1. ARs 1,700 croreCorrect
  2. BRs 1,300 crore
  3. CRs 1,000 crore
  4. DRs 1,900 crore

Explanation

Total expenditure = 6,500 + 1,300 = 7,800. Non-debt receipts = 5,000 + 800 + 200 + 100 = 6,100. Fiscal deficit = 7,800 - 6,100 = 1,700. Excluding the recoveries and other capital receipts would give 1,900, which is wrong because they are non-debt receipts.

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