Question

Match the following:

• A. A-II, B-II, C-III, D-IV
• B. A-II, B-I, C-III, D-IV
• C. A-I, B-II, C-IV, D-III
• D. A-III, B-IV, C-I, D-II

Hint:

Remember: \[ \text{Primary Deficit} = \text{Fiscal Deficit} - \text{Interest Payments} \] and \[ \text{Revenue Deficit} = \text{Revenue Expenditure} - \text{Revenue Receipts} \]

Answer 1

The Correct Option is B

Step 1: Understanding the Concept:
This question involves matching various fiscal indicators and expenditure types used in the government budget to their respective definitions or components.
Step 2: Detailed Explanation:
A. Primary Deficit: This measure shows the government's borrowing requirements excluding the burden of interest payments on past debts.
Matching: \( \text{Primary Deficit} = \text{Fiscal Deficit} - \text{Interest Payments (Net interest liabilities)} \). (A matches II)
B. Fiscal Deficit: It reflects the total borrowing requirement of the government. This includes internal borrowing (from the public and RBI) and external borrowing (from abroad).
Matching: Total Borrowing = Net borrowing at home + RBI + Abroad. (B matches I)
C. Revenue Deficit: This occurs when the government's current consumption expenditure exceeds its current income.
Matching: \( \text{Revenue Deficit} = \text{Revenue Expenditure} - \text{Revenue Receipts} \). (C matches III)
D. Revenue Expenditure: Historically, in the Indian budget, revenue expenditure was divided based on developmental objectives.
Matching: It is classified into Plan and Non-plan expenditure. (D matches IV)
Step 3: Final Answer:
The correct sequence is A-II, B-I, C-III, D-IV.