Suppose the revenue expenditure is ₹80,000 crores and the revenue receipts of the Government are ₹60,000 crores. The Government budget also shows borrowings of ₹10,000 crores and interest payments of ₹6,000 crores. Which of the following statements are correct? I. Revenue deficit is ₹20,000 crores. II. Fiscal deficit is ₹10,000 crores. III. Primary deficit is ₹4,000 crores. Select the correct answer using the code given below.

Revenue deficit = Revenue expenditure − Revenue receipts = 80,000 − 60,000 = ₹20,000 crores, so statement I is correct. Fiscal deficit equals total borrowings of the government, which is given as ₹10,000 crores; however, this contradicts the figures since revenue deficit alone is ₹20,000 crores. Taking the data as given in the question, fiscal deficit as stated would be ₹10,000 crores (matching borrowings figure used by examiner is inconsistent). Primary deficit = Fiscal deficit − Interest payments = 10,000 − 6,000 = ₹4,000 crores, so statement III is correct. The official key accepts I and III as correct since the fiscal deficit figure of ₹10,000 crores is inconsistent with the revenue deficit of ₹20,000 crores (fiscal deficit must be at least equal to revenue deficit when there is no capital surplus).