🧷 Authentic Classroom Explanation by IAS Monk

---

📌 The Question:

Suppose the revenue expenditure is ₹80,000 crores and the revenue receipts of the Government are ₹60,000 crores. The Government budget also shows borrowings of ₹10,000 crores and interest payments of ₹6,000 crores.

Which of the following statements are correct?

I. Revenue deficit is ₹20,000 crores.
II. Fiscal deficit is ₹10,000 crores.
III. Primary deficit is ₹4,000 crores.

Select the correct answer using the code given below:

(a) I and II only
(b) II and III only
(c) I and III only
(d) I, II and III

✅ Correct Answer: (d) I, II and III

---

🧠 Curiosity Raiser

Why does the Budget talk about three different deficits for the same year?
Because each deficit reveals a different layer of fiscal stress.

---

📘 Enrichment Notes (Numerical Clarity)

🔹 Revenue Deficit

Revenue Deficit = Revenue Expenditure − Revenue Receipts

= 80,000 − 60,000
= ₹20,000 crores

✅ Statement I is correct

---

🔹 Fiscal Deficit

Fiscal Deficit = Total Expenditure − (Revenue Receipts + Non-debt Capital Receipts)

Given borrowings = ₹10,000 crores, this itself represents the fiscal deficit.

✅ Statement II is correct

---

🔹 Primary Deficit

Primary Deficit = Fiscal Deficit − Interest Payments

= 10,000 − 6,000
= ₹4,000 crores

✅ Statement III is correct

---

One-line Memory Hook (Prelims Gold)

• Revenue Deficit → consumption problem
• Fiscal Deficit → borrowing requirement
• Primary Deficit → current year’s fiscal health (excluding past debt burden)

---

🧘‍♂️ IAS Monk Whisper

Deficits speak softly, but they reveal the soul of the Budget.