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Zorluk: OrtaEconomic Developments, Union & State Budgets, and Economic Surveys

Consider the following statements regarding key fiscal deficit terms and indicators used in the Union Budget of India:

1. Revenue Deficit refers to the excess of total expenditure (including capital expenditure) over total non-borrowed receipts.
2. Effective Revenue Deficit is calculated by deducting grants given to states for the creation of capital assets from the Revenue Deficit.
3. Primary Deficit is measured as Fiscal Deficit minus interest payments.

Which of the statements given above is/are correct?

  1. A
    1 and 2 only
  2. 2 and 3 onlyCevap
  3. C
    1 and 3 only
  4. D
    1, 2 and 3

Cevap

Statements 2 and 3 are correct.
The correct answer includes statements 2 and 3. Effective Revenue Deficit adjusts the Revenue Deficit by deducting capital-building grants to states, while Primary Deficit subtracts interest payments from the Fiscal Deficit.

Adım Adım Çözüm

1
Evaluate Statement 1 regarding Revenue Deficit
Statement 1 is incorrect.
Revenue Deficit is defined strictly as the difference between total revenue expenditure and total revenue receipts. The excess of total expenditure over non-borrowed receipts represents the Fiscal Deficit.
2
Evaluate Statement 2 regarding Effective Revenue Deficit
Statement 2 is correct.
Effective Revenue Deficit was introduced to reflect that a portion of central revenue grants spent by states actually contributes to capital asset formation.
3
Evaluate Statement 3 regarding Primary Deficit
Statement 3 is correct.
Primary Deficit equals Fiscal Deficit minus interest payments, indicating the government's borrowing requirement for current fiscal operations excluding debt servicing obligations.

Anahtar Kavram

Fiscal Deficit Definitions and Budgetary Balance Concepts
Tahmini Süre:1m 15s
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Konular

Economic Developments, Union & State Budgets, and Economic Surveys

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