Q. Which of the following best describes the implications of a high Revenue Deficit?

[A] It indicates the government is investing in infrastructure and asset creation.

[B] It implies the government is dis-saving and using past savings to meet current expenses.

[C] It shows surplus in the revenue account of the budget.

[D] It reflects an increase in tax revenues exceeding non-tax revenues.

Answer: B
Notes:

Explanation:

  • A high revenue deficit means the government is spending more than its revenue income on day-to-day operations, not asset creation.
  • It often leads to dis-saving and increased borrowing for consumption, not investment.

Source: Indian Economy (NCERT)

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