Economics • Indian EconomyEasy
What does 'Revenue Deficit' signify in the context of the Indian government budget?
A. When government revenue receipts fall short of revenue expenditure, implying borrowing for consumption purposes.✓ Correct Answer
B. The excess of capital expenditure over capital receipts in a financial year.
C. The net loss incurred by public sector undertakings.
D. The total interest payments made on national debt.
💡 Solution & Explanation
A revenue deficit arises when the government revenue expenditure exceeds its revenue receipts, indicating that borrowings are being utilized to finance routine consumption rather than productive capital assets. Other options describe capital account gaps or external debt obligations inaccurately. Tracking this metric is vital for evaluating fiscal discipline in the annual Union Budget.
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