Skip to content

CMA Final · Corporate Financial Reporting · Government Accounting in India

The Government of a State has the following figures for a year (Rs crore): Revenue receipts 8,000; Revenue expenditure 9,500; Recovery of loans 300; Other non-debt capital receipts 200; Capital expenditure 1,800. Loans and advances given are 400. Compute the Fiscal Deficit, treating the total expenditure as revenue plus capital expenditure plus loans and advances.

Fiscal deficit is total expenditure less non-debt receipts. Expenditure is 9,500 + 1,800 + 400 = 11,700 crore. Non-debt receipts are 8,000 + 300 + 200 = 8,500 crore. The deficit is therefore Rs 3,200 crore, representing the government's net borrowing requirement for the year.

  1. ARs 3,200 croreCorrect
  2. BRs 3,700 crore
  3. CRs 3,400 crore
  4. DRs 3,000 crore

Explanation

Total expenditure = 9,500 + 1,800 + 400 = 11,700. Non-debt receipts = 8,000 + 300 + 200 = 8,500. Fiscal deficit = 11,700 - 8,500 = 3,200. Option 1 ignores the other non-debt capital receipts of 200 and recoveries of 300 in part, and is wrong.

Did you get it right without looking?

One question tells you little. A timed set on Government Accounting in India shows your real accuracy, how long you take and where you lose marks.

Practise Government Accounting in IndiaFree diagnostic mock

More Government Accounting in India questions