ASSIGNMENT 1
[Link] Fiscal deficit.
[Link] difference between the revenue receipts and revenue expenditure of the govt. is known
as
(a) revenue deficit (b) budget deficit
(c) fiscal deficit (d) primary deficit
[Link] you are given the following data of a hypothetical economy :
(i) Total budgeted expenditure Rs. 1,000/-
(ii) Total budgeted revenue receipts
Rs. 700/-
(iii) Proceeds of Disinvestment. Rs. 150/-
(iv) Loans. Rs. 150/-
Then, the fiscal deficit equals:
(a) Rs. 150/-
(b) Rs. 300
(c) Rs. 700/-
(d) Rs. 1000/-
[Link] deficit in a budget will be zero when:
(a) revenue deficit is zero
(b) net interest payments are zero
(c) fiscal deficit is zero
(d) none
[Link] expenditure on national defence in India is categorized as:
(a) revenue expenditure
(b) capital expenditure
(c) confidential
(d) partly revenue expenditure and partly capital expenditure .
[Link] deficit and primary deficit can never be equal to each other. (True /false)
[Link] deficit = ……………
[Link] taxation reduces inequality of income and wealth. (True/false)
[Link] you are a member of the ‘Advisory Committee to the Finance Minister of India’.
The Minister is concerned about the rising Revenue Deficit in the budget.
Suggest any one measure about the rising Revenue deficit of the govt.
Q.10. Revenue deficit increase when govt. fails to recover loans forwarded to different nations.
(true/false)
(3-4 marks questions)
Q.11. ‘A large fiscal deficit leads to a higher revenue deficit in future.’ Do you agree with the
statement? Give reasons.
Q.12. ‘Government across nations are too much worried about the term fiscal deficit’. Do you
think that fiscal deficit is necessarily inflationary in nature? Give reasons.
Q.13. What are the limitations of taxation as an instrument of resource mobilization for the
government?
Q.14. What is meant by fiscal deficit ? How is the fiscal deficit of the govt. financed?
Q.15. Explain why public goods must be provided by the government?
Q.16. From the following calculate a) Revenue deficit B) fiscal deficit c) Primary deficit
Items. ( amount in rupees)
(i) Tax revenue. 47
(ii) Capital receipts. 34
(iii) Non-tax revenue. 10
(iv) Borrowings. 32
(v) Revenue expenditure. 80
(vi) Interest payments. 20
[Link] the following data of the govt. budget find (a) fiscal deficit (b) Primary deficit
Items. ( amount in rupees)
(i) Revenue expenditue. 70000
(ii) Borrowings 15000
(iii) Revenue receipts. 50000
(iv) Interest payments. 25% of revenue deficit
[Link] the following data about a govt. budget find:
a) Revenue deficit b) fiscal deficit
c) Primary deficit
Items. ( amount in rupees)
(i) Tax revenue. 1037
(ii) Revenue expenditure. 2811
(iii) Interest receipts by the govt. on net domestic lending 400
(iv) Dividends and profits on investments
600
(v) Recovery of loans. 135
(vi) Capital expenditure 574
(vii)Proceeds from sale of shares in PSUs
100
(viii)Interest payments on accumulated debts. 1013
[Link] the following data about a government budget calculate Primary deficit:
Items. ( amount in rupees)
(i) Revenue deficit. 40
(ii) Non-debt creating capital receipts
190
(iii) Tax revenue. 125
(iv) Capital expenditure. 220
(v) Interest payment. 20
[Link] the following revenue expenditure or capital expenditure in context of govt. budget. Give
reasons:
a) Expenditure on collection of taxes
b) Expenditure on purchasing computers
c) Expenditure on scholarships
d)Expenditure on building a bridge
