economics hard MCQ

The concept of 'Effective Revenue Deficit' was introduced in the Union Budget of which year to highlight the quality of government borrowing?

  1. 2008-09
  2. 2011-12
  3. 2015-16
  4. 2018-19

Answer: 2011-12

Introduced in 2011-12, the Effective Revenue Deficit excludes the revenue expenditure that goes towards the creation of durable assets (like rural roads or housing). It provides a more accurate picture of the government's unproductive borrowing, which is used merely to finance current consumption.

Topic Public Finance - Deficits
Exam Relevance UPSC Prelims, SSC CGL
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