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UPSC Prelims 2025 GS Paper 1, question 61

Topic: Economy

Q61

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. (a) I and II only
  2. (b) II and III only
  3. (c) I and III only
  4. (d) I, II and IIICorrect answer

Solution.

Answer: (d) I, II and III

  1. Statement I is correct: Revenue Deficit equals Revenue Expenditure minus Revenue Receipts, which is 80,000−60,000=20,00080,000 - 60,000 = 20,000 crores (in ₹).
  2. Statement II is correct: Fiscal Deficit equals total borrowing requirements of the Government, which is given as ₹10,00010,000 crores.
  3. Statement III is correct: Primary Deficit equals Fiscal Deficit minus Interest Payments, which is 10,000−6,000=4,00010,000 - 6,000 = 4,000 crores (in ₹).