Exams › SSC CGL (Prelims) › General

Why is revenue deficit a concern for the economy?

1. It increases productive investment
2. It improves trade surplus
3. It indicates borrowing for current spending
4. It boosts capital creation

Correct answer: It indicates borrowing for current spending

Solution

Revenue deficit shows that the government’s revenue receipts are insufficient to meet its revenue expenditure. This is a concern because it implies borrowing is being used for current consumption rather than productive investment.

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