Q. Consider the following statements in reference to Effective Revenue Expenditure.

Which of the statements given above is/are correct?

1 only

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2 only

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Both 1 and 2

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Neither 1 nor 2

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Solution

The correct option is D Neither 1 nor 2
Explanation:

Statement 1 is incorrect. The concept of effective revenue deficit has been suggested by the Rangarajan Committee on Public Expenditure.

Statement 2 is incorrect. Effective Revenue Deficit is the difference between revenue deficit and grants for creation of capital assets. It aims to ascertain the actual deficit in the revenue account after adjusting for expenditure of capital nature.

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Similar questions

Q. Consider the following statements in reference to Effective revenue deficit:

Which of the statements given above is/are correct?

Which among the following statements are correct about various budgetary deficits in India?

Codes :

From the following data about a government budget, find (a) revenue deficit, (b) fiscal deficit, and (c) primary deficit:

Items (Rs in lakh)

(i) Tax revenue 50

(ii) Revenue expenditure 110

(iii) Capital expenditure 210

(iv) Non-tax revenue 30

(v) Capital receipts net of borrowing 140

(vi) Interest payments 20

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