Which of the following concepts of Budget deficit has become practically redundant in India?a)Fiscal deficitb)Budgetary deficitc)Primary deficitd)Revenue deficitCorrect answer is option 'B'. Can you explain this answer?

Question

Answer

Explanation:

Budgetary Deficit:
- Budgetary deficit refers to the excess of total budget expenditure over total budget receipts.
- It was the most commonly used concept of budget deficit in India in the past.

Changes in Terminology:
- Over time, the concept of budgetary deficit has become practically redundant in India.
- This is due to the introduction and emphasis on more nuanced concepts like fiscal deficit, revenue deficit, and primary deficit.

Fiscal Deficit:
- Fiscal deficit is the difference between the government's total expenditure and total revenue (excluding borrowing).
- It is considered a more comprehensive measure of the government's financial health compared to budgetary deficit.

Primary Deficit:
- Primary deficit is the fiscal deficit minus interest payments on past borrowing.
- It is a key indicator of the government's ability to meet its current expenditure without resorting to further borrowing.

Revenue Deficit:
- Revenue deficit is the excess of revenue expenditure over revenue receipts.
- It indicates the extent to which the government is dependent on borrowings to meet its day-to-day expenses.

Conclusion:
- While budgetary deficit was commonly used in the past, it has become less relevant in the current fiscal landscape of India.
- Concepts like fiscal deficit, primary deficit, and revenue deficit provide a more detailed and accurate picture of the government's financial position.

Similar CA CPT Doubts

Which of the following concepts of budget deficit has become practically redundant in India?

If borrowing and other liabilities are added to the budget deficits we get_______________

The difference between fiscal deficit and interest payment during the year is called

The difference between revenue deficit and grants for creation of capital assets is called

Top Courses for CA CPTView all

Quantitative Aptitude for CA Foundation

Principles and Practice of Accounting

Business Laws for CA Foundation

Business Economics for CA Foundation

Mock Tests & Past Year Papers for CA Foundation

Top Courses for CA CPT

Top Courses for CA CPT

Suggested Free Tests

Related Content

CA Foundation Courses

Other Courses

How To Prepare?

Other Exams

Company