From the following budget data of a government (all figures in Rs crore), calculate the fiscal deficit: Revenu

Worked Examples · Example 13

Q. From the following budget data of a government (all figures in Rs crore), calculate the fiscal deficit: Revenue Receipts = 8,00,000; Non-debt Capital Receipts (recovery of loans + disinvestment) = 1,00,000; Total Expenditure = 12,00,000.

ChseodishaTextbookSubjectiveImportance★★★★★est

30% · 13/44 Questions

🔒 Locked · start free trial →

You're viewing a preview — the full solution, concept, methods & PYQ mapping are locked.

Start your 14-day free trial to unlock the full solution →

The fiscal deficit is the excess of the government's total expenditure over its total receipts excluding borrowings — that is, the amount the government must borrow during the year:

\text{Fiscal Deficit} = \text{Total Expenditure} - (\text{Revenue Receipts} + \text{Non-debt Capital Receipts})

Step 1 — sum the non-borrowing receipts:

8{,}00{,}000 + 1{,}00{,}000 = 9{,}00{,}000

Step 2 — subtract from total expenditure:

$12{,}00{,}000 - 9{,}00{,}000 = 3{,}00{,}000$ …

Start your 14-day free trial to unlock the full solution →

Same / Similar Concept — real previous-year questions on the same or a closely similar concept, not this exact question.

CBSE 2023Set ANNUAL1 mark
$Q. Examine the correctness of the following statement and correct it if incorrect, without changing the underlined portion : Surplus budget is more effective to control inflation.$
›Reveal solutionSolution

The statement is correct — a surplus budget helps curb inflation by reducing aggregate demand.

A surplus budget is one in which the government's revenue (mainly taxes) exceeds its expenditure. Inflation is a situation of excess aggregate demand — too much money chasing too few goods, pushing the general price level up.

To control inflation the government needs to reduce aggregate demand/purchasing power in the hands of the public. A surplus budget does exactly this: by collecting more in taxes than it spends, the government mops up surplus purchasing power from households and firms and injects less back through spending. The net withdrawal of demand pulls down the upward pressure on prices. (The opposite, …

Start your 14-day free trial to see the full solution →
CBSE 2023Set ANNUAL1 mark
$Q. Examine the correctness of the following statement and correct it if incorrect, without changing the underlined portion : In a balanced budget, government receipts are greater than government expenditure.$
›Reveal solutionSolution
The statement is incorrect; in a balanced budget receipts equal expenditure. Correct statement: 'In a balanced budget, government receipts are equal to government expenditure.'

A government budget is classified by the relationship between its receipts and its expenditure:

Balanced budget — government receipts = government expenditure. Income and spending exactly match.

Surplus budget — government receipts > expenditure (useful to curb inflation).

Deficit budget — government expenditure > receipts (useful to fight depression/unemployment). …
Start your 14-day free trial to see the full solution →
CBSE 2019Set ANNUAL1 mark
$Q. Examine the correctness of the following statement. Correct it if necessary, without changing the portion underlined : Surplus budget is useful during deflation. (underlined: Surplus budget is useful during)$
›Reveal solutionSolution
The statement is incorrect; a surplus budget is useful during inflation, not deflation.

This is a correct-the-statement item in CHSE Odisha +2 Business Economics, keeping the underlined part — 'Surplus budget is useful during' — unchanged.

A surplus budget (revenue exceeds expenditure) withdraws purchasing power from the economy. This is the right tool during inflation, when aggregate demand is excessive and must be curbed. …
Start your 14-day free trial to see the full solution →
CBSE 2019Set ANNUAL1 mark
$Q. Examine the correctness of the following statement. Correct it if necessary, without changing the portion underlined : In public finance normally expenditure is adjusted to income. (underlined: In public finance normally expenditure is / adjusted to income)$
›Reveal solutionSolution
The statement is incorrect; in public finance income is adjusted to expenditure, not the other way round.

This is a correct-the-statement item in CHSE Odisha +2 Business Economics, keeping the underlined part — 'In public finance normally ... adjusted to ...' — unchanged.

A classic distinction between private and public finance:

In private finance, an individual first knows his income and then plans his expenditure within it — expenditure is adjusted to income. …
Start your 14-day free trial to see the full solution →

←Previous questionExample 10 — A commercial bank receives an initial (primary) deposit of Rs 20,000. …→Next questionQ14 — Which of the following is a direct tax? (a) Goods and Services Tax (GS…

Q.From the following budget data of a government (all figures in Rs crore), calculate the fiscal deficit: Revenue Receipts = 8,00,000; Non-debt Capital Receipts (recovery of loans + disinvestment) = 1,00,000; Total Expenditure = 12,00,000.

Concept understanding — Public Finance

Q.From the following budget data of a government (all figures in Rs crore), calculate the fiscal deficit: Revenue Receipts = 8,00,000; Non-debt Capital Receipts (recovery of loans + disinvestment) = 1,00,000; Total Expenditure = 12,00,000.

🎓Unlock everything free for 14 days

Unlock everything free for 14 days