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Which of the following are to be considered while Measuring Fiscal Deficit?

A. Capital expenditure

B. Revenue receipts

C. Debt creating receipts

D. Revenue expenditure

E. Deficit on current A/c

Choose the correct answer from the options given below:

Solution

Correct Option: 2

Fiscal Deficit = Total Expenditure (Revenue + Capital) - (Revenue Receipts + Non-debt creating capital receipts). It therefore uses Capital Expenditure (A), Revenue Receipts (B), and Revenue Expenditure (D). Debt-creating receipts (C) are what finance the deficit, not inputs for its measurement. Current account deficit (E) is a BoP concept. Hence A, B, D only.

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