UPSC solved previous year questions

UPSC Fiscal deficit PYQ with Answers

5 solved Fiscal deficit questions from previous UPSC papers, each with an answer and explanation.

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Questions
5
Years covered
2016–2025
Exam years
3
With answers
5

Fiscal deficit questions by year

20253 2023 🔒1 2016 🔒1

UPSC Fiscal deficit PYQ with Answers

1–3 of 3
  1. Q1 2025 Prelims GS

    Consider the following statements: I. Capital receipts create a liability or cause a reduction in the assets of the Government. II. Borrowings and disinvestment are capital receipts. III. Interest received on loans creates a liability of the Government. Which of the statements given above are correct?

    1. I and II only✓
    2. II and III only
    3. I and III only
    4. I, II and III
    Answer explanation

    I and II only Capital receipts either create a liability (e.g., borrowings) or reduce assets (e.g., disinvestment/recovery of loans), making Statement I correct; borrowings and disinvestment are indeed capital receipts, making Statement II…

    BudgetEconomyFiscal deficit
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  2. Q2 2025 Prelims GS

    Suppose the revenue expenditure is ₹80,000 crores and the revenue receipts of the Government are ₹60,000 crores. The Government budget also shows borrowings of ₹10,000 crores and interest payments of ₹6,000 crores. Which of the following statements are correct? I. Revenue deficit is ₹20,000 crores. II. Fiscal deficit is ₹10,000 crores. III. Primary deficit is ₹4,000 crores. Select the correct answer using the code given below.

    1. I and II only
    2. II and III only
    3. I and III only
    4. I, II and III✓
    Answer explanation

    I, II and III Revenue deficit = Revenue expenditure − Revenue receipts = 80,000 − 60,000 = ₹20,000 crores (I correct). Fiscal deficit equals total borrowings (as fiscal deficit is financed by borrowings) = ₹10,000 crores (II correct).…

    BudgetEconomyFiscal deficit
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  3. Q3 2025 Prelims GS

    A country's fiscal deficit stands at ₹50,000 crores. It is receiving ₹10,000 crores through non-debt creating capital receipts. The country's interest liabilities are ₹1,500 crores. What is its gross primary deficit?

    1. ₹48,500 crores✓
    2. ₹51,500 crores
    3. ₹58,500 crores
    4. None of the above
    Answer explanation

    ₹48,500 crores Gross primary deficit = Fiscal deficit − Interest payments = 50,000 − 1,500 = ₹48,500 crores. (The non-debt creating capital receipts figure is extraneous information for this particular calculation of gross primary deficit…

    EconomyFiscal deficitPrimary deficit
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