Question

Identify which of the following is not to be considered while estimating revenue deficit of a country.

Options

• Wages and salaries paid by the government.

• Interest payments made by the Central Government.

• Direct Tax Collection.

• Expenditure incurred on construction of flyover.

Answer 1

Expenditure incurred on construction of flyover.

Explanation:

Excess revenue expenditure (RE) above revenue receipts (RR) is known as the revenue deficit. Since the cost of building the flyover is a capital expenditure and impacts government assets, it is not included in the revenue shortfall.