Which of the following are incorrect about Effective Revenue Deficit ........

Economic Affairs Public Finance and Debt Management

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Which of the following are incorrect about Effective Revenue Deficit?

It was introduced in Union Budget 2011-12.

It excludes Grants for Creation of Capital Assets (GoCA) from revenue deficit.

Expenditure on centrally Sponsored schemes like Pradhan Mantri Gram Gram Sadak Yojana is excluded from it.

All grants from centre to states are excluded from it.

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Explanation:

4th option is incorrect.

Effective Revenue deficit is a new term introduced in the Union Budget 2011-12. While revenue deficit is the difference between revenue receipts and revenue expenditure, the present accounting system includes all grants from the Union Government to the state governments/Union territories/other bodies as revenue expenditure, even if they are used to create assets.