What is a revenue deficit in the government budget?
Show answer & explanation
Correct answer: D
Explanation
The correct answer is option 4 i.e. the excess of expenditure over revenue, including interest payments on debt.
A revenue deficit in the government budget occurs when the expenditure exceeds the revenue generated, including interest payments on debt. It indicates that the government is borrowing to meet its day-to-day expenses, not including capital expenditure.
Other options:
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Fiscal deficit: The total borrowing requirements of the government, including both revenue and capital expenditures.
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Primary deficit: The fiscal deficit excluding interest payments on past debt.
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Budget deficit: The overall shortfall between total government expenditure and revenue.