Which of the following statements about Public Finance in India is/are INCORRECT?
I.   Revenue Deficit refers to the excess of revenue expenditure over revenue receipts and indicates that the government is dissaving.
II.  Capital Expenditure includes spending on wages, salaries, subsidies, and interest payments on past borrowings.
III. The Fiscal Deficit equals the total borrowing requirement of the government and is the broadest measure of the government's budget imbalance.

Statement I is correct — Revenue Deficit = Revenue Expenditure minus Revenue Receipts; a revenue deficit means the government is spending more on day-to-day operations than it earns, implying dissaving. Statement II is INCORRECT — wages, salaries, subsidies, and interest payments are REVENUE expenditure, not capital expenditure. Capital expenditure covers spending that creates assets or reduces liabilities — such as infrastructure investment, defence equipment, and loan repayments. Statement III is correct — Fiscal Deficit = Total Expenditure minus Total Receipts (excluding borrowings), and equals the government's gross borrowing requirement.