Q160. If revenue expenditure is ₹80,000 crore, revenue receipts ₹60,000 crore, borrowing ₹10,000 crore and interest payments ₹6,000 crore, which are true?
I. Revenue deficit ₹20,000 crore.
II. Fiscal deficit ₹10,000 crore.
III. Primary deficit ₹4,000 crore.
[UPSC CSE Prelims 2025]
(A) I and II only
(B) II and III only
(C) I and III only
(D) I, II and III
Answer: (D) I, II and III
Explanation: Revenue deficit equals ₹80,000 minus ₹60,000, or ₹20,000 crore. Government borrowing of ₹10,000 crore reflects the fiscal shortfall. Deducting ₹6,000 crore interest from fiscal deficit gives a ₹4,000-crore primary deficit. All three statements therefore agree with the definitions.
Q159. A government has fiscal deficit ₹50,000 crore and interest liabilities ₹1,500 crore. Non-debt capital receipts are ₹10,000 crore. What is the gross primary deficit?
[UPSC CSE Prelims 2025]
(A) ₹48,500 crore
(B) ₹51,500 crore
(C) ₹58,500 crore
(D) None of these
Answer: (A) ₹48,500 crore
Explanation: Gross primary deficit is fiscal deficit less net interest liabilities. Subtracting ₹1,500 crore from ₹50,000 crore gives ₹48,500 crore. The ₹10,000-crore non-debt capital receipt is already accounted for when fiscal deficit is measured and is not removed again.
Q158. Regarding the Fifteenth Finance Commission, which are correct?
I. ₹4,800 crore education grants.
II. 45% central-tax devolution.
III. ₹45,000 crore agricultural-reform incentive.
IV. Restoration of tax-effort criterion.
[UPSC CSE Prelims 2025]
(A) I, II and III
(B) I, II and IV
(C) I, III and IV
(D) II, III and IV
Answer: (C) I, III and IV
Explanation: The Fifteenth Commission proposed the education and agricultural incentives and reintroduced tax effort as a distribution criterion. However, its States’ vertical share was 41%, not 45%, of the divisible pool. Hence the incorrect second statement must be excluded.
Q157. Which comparison about agricultural income and rural land under the Income-tax Act, 1961 is accurate?
I. Rural poultry and wool income is always tax-exempt.
II. Rural agricultural land is excluded from the definition of capital asset.
[UPSC CSE Prelims 2025]
(A) Both correct; II explains I
(B) Both correct; II does not explain I
(C) Only I correct
(D) Only II correct
Answer: (D) Only II correct
Explanation: Exemption of agricultural income is tied to qualifying agricultural land, not automatically to poultry or wool production. Separately, rural agricultural land is generally excluded from capital assets for capital-gains purposes. Thus the two statements have different legal treatments.
Q156. Regarding government revenue enforcement, how many of these alignments are correct?
I. Enforcement Directorate—Home Ministry Internal Security Division.
II. Directorate of Revenue Intelligence—Department of Revenue, Customs Act.
III. DG Systems and Data Management—lead agency for CBIC risk analytics.
[UPSC CSE Prelims 2025]
(A) Only one
(B) Only two
(C) All three
(D) None
Answer: (A) Only one
Explanation: The Directorate of Revenue Intelligence operates within the Department of Revenue on customs intelligence and enforcement. The Enforcement Directorate also belongs under the Finance Ministry, not the indicated Home division. CBIC’s dedicated risk-analytics agency is DGARM.
Q155. Consider:
I. Income tax and dividends received from public-sector companies are revenue receipts.
II. Disinvestment proceeds from PSU shares are revenue receipts.
Which statement is correct?
[SSC CGL Tier I, 26 September 2025, Shift 2]
(A) Only I
(B) Only II
(C) Both I and II
(D) Neither I nor II
Answer: (A) Only I
Explanation: Income tax is tax revenue and PSU dividends are non-tax revenue, so both appear in the revenue account. Sale of government shareholding reduces financial assets and is recorded as non-debt capital receipt. Consequently the second proposition is incorrect.
Q154. Why is a revenue deficit considered economically concerning?
[SSC CGL Tier I, 23 September 2025, Shift 2]
(A) It necessarily raises productive investment
(B) It improves the trade surplus
(C) It suggests borrowing to finance current expenditure
(D) It automatically boosts asset creation
Answer: (C) It suggests borrowing to finance current expenditure
Explanation: When ordinary receipts cannot cover salaries, interest, subsidies and similar recurrent spending, the government may rely on borrowing. This creates repayment commitments without necessarily creating productive assets, limiting fiscal space in future years. Hence a persistent revenue deficit merits attention.
Q153. Which is an example of a government capital receipt?
[SSC CGL Tier I, 22 September 2025, Shift 3]
(A) Income-tax collection
(B) Dividends from public-sector companies
(C) A loan taken from the RBI
(D) Fees earned from public services
Answer: (C) A loan taken from the RBI
Explanation: An RBI loan received by the government produces a repayment liability and therefore qualifies as a capital receipt. Income taxes, PSU dividends and administrative fees do not create such a liability or dispose of an asset; these are revenue receipts.
Q152. What is another term for the revenue account of the government budget?
[SSC CGL Tier I, 21 September 2025, Shift 2]
(A) Finance budget
(B) Expenditure budget
(C) Revenue budget
(D) Capital budget
Answer: (C) Revenue budget
Explanation: The revenue budget reports recurring receipts, including taxes and fees, together with revenue expenditure such as interest and salaries. The capital budget separately records loans, asset sales, capital formation and repayment. Therefore the revenue account is termed the revenue budget.
Q151. How is the revenue deficit calculated?
[SSC CGL Tier I, 20 September 2025, Shift 3]
(A) Revenue expenditure minus revenue receipts
(B) Revenue receipts minus capital receipts
(C) Total expenditure minus total receipts
(D) Capital expenditure minus revenue expenditure
Answer: (A) Revenue expenditure minus revenue receipts
Explanation: The revenue deficit isolates a shortfall on the recurring side of the budget. It arises when revenue expenditure exceeds tax and non-tax revenue receipts. Capital receipts and capital expenditure belong to a different account and cannot replace these two terms.
