UPSC Prelims 2025 · GS Paper I
Question 61: Economy and Social Development
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?
- IRevenue deficit is ₹ 20,000 crores.
- IIFiscal deficit is ₹ 10,000 crores.
- IIIPrimary deficit is ₹ 4,000 crores.
Select the correct answer using the code given below.
AnswerThe answer is (d).
Revenue deficit is revenue expenditure minus revenue receipts: 80,000 minus 60,000 is 20,000 crore, so Statement I is correct. Fiscal deficit is the total borrowing the government needs, and the budget shows borrowings of 10,000 crore, so the fiscal deficit is 10,000 crore and Statement II is correct. Primary deficit is fiscal deficit minus interest payments: 10,000 minus 6,000 is 4,000 crore, so Statement III is correct. Remember: primary deficit is the fiscal deficit net of interest.
- I. 80,000 minus 60,000 gives a revenue deficit of 20,000 crore.
- II. Fiscal deficit equals the borrowing requirement of 10,000 crore.
- III. 10,000 minus interest of 6,000 gives a primary deficit of 4,000 crore.
How you could have got this
- If you were sure statement I is correct, (b) goes: it leaves I out.
What you needed to know: 80,000 minus 60,000 gives a revenue deficit of 20,000 crore.
- Then, if you were sure statement II is correct, (c) goes: it leaves II out.
What you needed to know: Fiscal deficit equals the borrowing requirement of 10,000 crore.
- Then, if you were sure statement III is correct, (a) goes: it leaves III out.
What you needed to know: 10,000 minus interest of 6,000 gives a primary deficit of 4,000 crore.
Only (d) is left. This one needs every statement.
This follows an unofficial answer: UPSC has not published its key for this year, and if that answer is wrong, so is this path.
Which options go is worked out from UPSC’s key and the options, not by a model.
Why each option is right or wrong
- (a) Wrong: the primary deficit of 4,000 crore is also correct.
- (b) Wrong: the revenue deficit of 20,000 crore is also correct.
- (c) Wrong: the fiscal deficit equals the 10,000 crore borrowing, so II is also correct.
- (d) Right: revenue deficit 20,000, fiscal deficit 10,000 and primary deficit 4,000 crore are all correct.
Explanation: written by UPSC Grade, not by UPSC.
Source: UPSC, Civil Services (Preliminary) Examination 2025, General Studies Paper I, Series A. The paper on upsc.gov.in.