Question

Identify, which of the following is not to be considered while estimating Revenue Deficit of a country.

• A. Wages and salaries paid by the government
• B. Interest payments made by the Central Government
• C. Direct Tax Collection
• D. Expenditure incurred on construction of flyover

Hint:

Revenue deficit only involves the government's income and expenditure, excluding capital receipts like taxes.

Answer 1

The Correct Option is C

A revenue deficit occurs when government revenue expenditure surpasses its revenue receipts. Direct tax collection is not factored into the revenue deficit calculation but is included in the government's total revenue.