SSC CGL 2025 PYQ — Question 31

The correct answer is option 3 i.e. It indicates borrowing for current spending.

A revenue deficit occurs when the government's revenue expenditure exceeds its revenue receipts. This is a serious concern because it implies the government is borrowing money not to build assets like roads or schools, but to cover day-to-day operational costs (like salaries or interest payments). This leads to diseconomy, as it increases the debt burden without creating any productive assets that could generate future income, eventually leading to a debt trap and inflation.