RAS question
Revenue Deficit is:
Correct answer: (B) Revenue expenditure minus revenue receipts.
Revenue deficit is the excess of revenue expenditure over revenue receipts, or revenue expenditure minus revenue receipts.
Explanation
Revenue deficit measures the gap within the government's revenue account: Revenue Deficit = Revenue Expenditure - Revenue Receipts. The Union Budget's Budget at a Glance defines it as the excess of revenue expenditure over revenue receipts, which is why option B is the precise formulation. The idea is not about all receipts and all expenditure, but only the revenue side. When revenue receipts are not enough to meet revenue expenditure, the government has to finance routine or consumption expenditure through borrowing. A persistent revenue deficit is therefore a warning sign, because borrowing is being used for current expenditure rather than being limited to asset-creating or capital purposes.
Why the other options are wrong
- (A) Total expenditure minus total receipts is closer to fiscal deficit, which Budget at a Glance treats separately from revenue deficit.
- (C) Capital expenditure minus capital receipts belongs to the capital account, while revenue deficit is confined to revenue expenditure and revenue receipts.
- (D) Fiscal deficit minus interest payments is primary deficit, not revenue deficit, as Budget at a Glance separately defines primary deficit in that way.
Concept
This tests basic public finance terminology under the Indian Economy portion of the RAS syllabus. It recurs because deficit indicators are standard tools for reading Union and state budgets.