Question

Which of the following scenarios correctly describes a 'Revenue Deficit' in the Union Budget?

Q: Answer-Which of the following scenarios correctly describes a 'Revenue Deficit' in the Union Budget?

Revenue Deficit Revenue Expenditure Revenue Receipts. Revenue receipts include tax revenue and non-tax revenue revenue expenditure includes salaries, subsidies, interest payments, pensions, and other administrative expenses. A revenue deficit indicates that the governments regular income is insufficient to cover its routine expenses it must borrow to fund operations, not just capital investments. A revenue deficit is considered unfavourable because borrowing for consumption rather than investment adds to debt without creating productive assets. Option A describes the Fiscal Deficit Option E describes the Primary Deficit fiscal deficit minus interest payments. Budget 2026-27 targets a fiscal deficit of 4.3 of GDP.

A The government's total expenditure exceeds its total receipts, including both capital and revenue accounts

B The government's capital expenditure exceeds its capital receipts

C The government's revenue expenditure exceeds its revenue receipts, meaning the government must borrow even to meet its day-to-day operational expenses

D The government's interest payments on debt exceed its tax revenues

E The fiscal deficit after excluding interest payments on past borrowings

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