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Friends, Updating here the recollected questions from June 2018 Exams. Wish you all the very best for your exam.
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Given the following data (Rs. in Arab) about a government budget
Capital Receipts Net of Borrowings - 95
Revenue Expenditure - 100
Interest Payments - 10
Revenue Receipts - 80
Capital Expenditure - 110
1. Find out the Revenue deficit
a. Rs. 20 Arab
b. Rs. 25 Arab
c. Rs. 35 Arab
d. Rs. 40 Arab
Ans - a
2. Find out the Fiscal deficit
a. Rs. 20 Arab
b. Rs. 25 Arab
c. Rs. 35 Arab
d. Rs. 40 Arab
Ans - c
3. Find out the Primary deficit
a. Rs. 20 Arab
b. Rs. 25 Arab
c. Rs. 35 Arab
d. Rs. 40 Arab
Ans - b
Solution
1. Revenue Deficit = Revenue Expenditure – Revenue Receipts
= 100 - 80
= Rs. 20 Arab
2. Fiscal Deficit = [Revenue Expenditure + Capital Expenditure] – [Revenue Receipt + Capital Receipt Net of Borrowing]
= (100 + 110) - (80 + 95)
= 210 - 175
= Rs. 35 Arab
3. Primary Deficit = Fiscal Deficit – Interest Payments
= 35 - 10
= Rs. 25 Arab
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Consider the following data:
1. Revenue deficit (RD) = 3% of GDP
2. Grants for capital formation = 1.8% of GDP
3. Primary deficit (PD) = 1.2%
4. Non-plan expenditure = 1.5%
In the above scenario, effective revenue deficit (ERD) will be:
a. 1.2%
b. 1.5%
c. 1.8%
d. cannot be calculated
Ans - a
Solution
ERD = RD – Grants for capital formation
=3% – 1.8%
= 1.2%
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From the following information of budget (Rs. Cr)
Revenue Expenditure-70000
Borrowing-15000
Revenue Receipt-50000
Interest payment- 25% of Revenue deficit
01. Calculate Fiscal Deficit
a. 15000
b. 85000
c. 65000
d. 12500
Ans- a
02. Calculate Primary Deficit
a. 15000
b. 20000
c. 10000
d. 5000
Ans- c
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