Question

Consider the following statements about 'Effective Revenue Deficit':
1. Effective revenue deficit refers to the difference between fiscal deficit and grants for creation of capital assets.
2. Effective revenue deficit signifies that amount of capital receipts that are being used for actual consumption expenditure of the government.
3. This concept was introduced in the Union Budget 2011-12.
Select the correct statements using the codes given below:

• A. 1 only
• B. 1 and 3
• C. 2 and 3
• D. 1, 2 and 3

Answer 1

Answer: (C)

2 and 3

Effective Revenue Deficit is the difference between revenue deficits and the grants for creation of capital assets. It is a new term introduced in the Union Budget 2011-12. It signifies that amount of capital receipts that are being used for actual consumption expenditure of the Government.