Set A - UPSC Prelims 2025 Solutions

QQuestion

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.

OOptions

A) I and II only

B) II and III only

C) I and III only

D) I, II and III

✓Correct Answer

C) I and III only

DDalvoy Solutions

Given the budget figures, let's calculate each deficit:

I. Revenue deficit is ₹20,000 crores: Correct. Revenue deficit = Revenue expenditure - Revenue receipts = ₹80,000 - ₹60,000 = ₹20,000 crores.

II. Fiscal deficit is ₹10,000 crores: Incorrect. Fiscal deficit = Total expenditure - Total receipts (excluding borrowings). We need total expenditure, but we only have revenue expenditure. However, if borrowings are ₹10,000 crores, fiscal deficit would typically be higher than ₹10,000 crores.

III. Primary deficit is ₹4,000 crores: Correct. Primary deficit = Fiscal deficit - Interest payments. If we assume fiscal deficit calculation leads to this, then ₹10,000 - ₹6,000 = ₹4,000 crores.

Solution Diagram for Q<built-in function id>

SUPSC Prelims Strategy and Tips

For budget deficit calculations, use the standard formulas: Revenue deficit = Revenue expenditure - Revenue receipts; Fiscal deficit = Total expenditure - Total receipts (excluding borrowings); Primary deficit = Fiscal deficit - Interest payments.

SUPSC Prelims 2025 Syllabus Analysis

Economics - Government budget and fiscal indicators

AUPSC Prelims 2025 Question Analysis

Medium to Hard difficulty - requires calculation skills and understanding of budget terminology

Question 61

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