UPSC Previous Year Question | Prelims GS | 2025

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

Correct Answer

I, II and III

Explanation

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). Primary deficit = Fiscal deficit − Interest payments = 10,000 − 6,000 = ₹4,000 crores (III correct). All three statements are correct.

Topics: budget, economy, fiscal deficit