📘 IAS Prelims 2025 — GS-I Q.61 | Classroom Explanation

(Public Finance | Budgetary Deficits)

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📌 Question Recap

Revenue Expenditure = ₹80,000 crore
Revenue Receipts = ₹60,000 crore
Borrowings = ₹10,000 crore
Interest Payments = ₹6,000 crore

Which of the following statements are correct?

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

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✅ Correct Answer: (d) I, II and III

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🧑‍🏫 Classroom Explanation (Step-by-Step, Exam-Safe)

This is a pure formula-based question, but UPSC often traps aspirants by mixing borrowings, interest payments, and receipts. Let us decode calmly.

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🧮 1️⃣ Revenue Deficit

📌 Formula
Revenue Deficit = Revenue Expenditure − Revenue Receipts

📐 Calculation
= 80,000 − 60,000
= ₹20,000 crore

✅ Statement I is correct

🧠 Meaning: Government is borrowing even to meet day-to-day expenses.

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🧮 2️⃣ Fiscal Deficit

📌 Conceptual Formula
Fiscal Deficit = Total Expenditure − (Revenue Receipts + Non-Debt Capital Receipts)

👉 In numerical questions, UPSC often gives borrowings directly, which equals Fiscal Deficit.

📐 Given
Borrowings = ₹10,000 crore

👉 Therefore,
Fiscal Deficit = ₹10,000 crore

✅ Statement II is correct

🧠 Meaning: Total gap between government expenditure and non-borrowed receipts.

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🧮 3️⃣ Primary Deficit

📌 Formula
Primary Deficit = Fiscal Deficit − Interest Payments

📐 Calculation
= 10,000 − 6,000
= ₹4,000 crore

✅ Statement III is correct

🧠 Meaning: Borrowing requirement excluding past debt burden.

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📊 One-Glance Summary Table

Deficit Type	Formula	Value
Revenue Deficit	Revenue Exp − Revenue Rec	₹20,000 cr
Fiscal Deficit	Borrowings (given)	₹10,000 cr
Primary Deficit	Fiscal − Interest	₹4,000 cr

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🎯 Final Answer

✅ Correct Answer: (d) I, II and III

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🧠 Prelims Memory Locks (Very High Yield)

🔑 Borrowings = Fiscal Deficit (when directly given)
🔑 Primary Deficit ignores interest
🔑 Revenue Deficit shows consumption borrowing

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