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Fiscal deficit can be written as revenue deficit plus capital expenditure minus
Atotal revenue receipts
Bnet borrowing from abroad
Cnon-debt creating capital receipts
Dinterest payments on old debt
Answer & Solution
Correct answer: C. non-debt creating capital receipts
1. Start from revenue deficit, the gap on the revenue account.
2. Add capital expenditure, which also needs financing.
3. Subtract **non-debt creating capital receipts**, since those fund spending without borrowing.
4. Subtracting interest payments instead would give the primary deficit, which is the neighbouring formula and the likely confusion.
_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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