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Gross fiscal deficit equals total expenditure minus
Arevenue receipts net of subsidy
Brevenue and non-debt capital receipts
Ctax revenue and total borrowings
Dcapital receipts including loans
Answer & Solution
Correct answer: B. revenue and non-debt capital receipts
1. Fiscal deficit measures what the government must borrow.
2. So borrowings themselves are excluded from the receipts side.
3. Gross fiscal deficit = total expenditure - (**revenue receipts + non-debt creating capital receipts**).
4. Including borrowings on the receipts side would make the deficit vanish by definition, which is the error the fourth option invites.
_Source: NCERT Class 12 Introductory Macroeconomics, Ch 5 "Government Budget and the Economy", section 5.2.1 Measures of Government Deficit_
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