CAPF AC 2025 Q24: Indian Economy – Fiscal Policy & Budget
- (a) 4.8 percent
- (b) 4.4 percent
- (c) 5.0 percent
- (d) 5.6 percent
Answer: (b) 4.4 percent
Explanation
Fiscal deficit in Budget 2025-26
How to think: remember the glide path: the government reduces the deficit step by step towards 4.5% by 2025-26.
The Budget went slightly below that target.
| Year | Fiscal deficit as % of GDP |
|---|---|
| 2023-24 (actual) | 5.6 |
| 2024-25 (revised estimate) | 4.8 |
| 2025-26 (budget estimate) | 4.4 |
The figure 4.8% is last year's revised estimate and 5.6% is the actual for 2023-24, which are the distractors.
Bank key corrected: the stored key was (a) 4.8%; the budget estimate for 2025-26 is 4.4%, (b).
Answer: (b) 4.4 percent.
Why each option is right or wrong
- (a) Incorrect. 4.8% is the revised estimate for 2024-25, not 2025-26.
- (b) CORRECT. The budget estimate for 2025-26 is 4.4% of GDP.
- (c) Incorrect. 5.0% is not the Budget figure for 2025-26.
- (d) Incorrect. 5.6% is the actual for 2023-24.
Key point
Fiscal deficit (% of GDP): 2023-24 actual 5.6; 2024-25 RE 4.8; 2025-26 BE 4.4. Target of below 4.5% by 2025-26. Fiscal deficit = total expenditure minus total receipts excluding borrowings.
Remember
5.6 (2023-24), 4.8 (2024-25 RE), 4.4 (2025-26 BE).
Common mistakes
- Giving last year's revised estimate (4.8%) instead of the new budget estimate.
- Mixing BE (budget estimate) with RE (revised estimate).
- Remembering 4.5% as the answer; that was the target, and the Budget beat it.
Exam tip
Educated guess: the deficit falls each year, 5.6, 4.8, then the lowest option, 4.4. The next year's figure must be below this year's 4.8.
Sources
- Union Budget 2025-26, Budget Speech of the Finance Minister, Part A (1 February 2025): fiscal deficit
- Union Budget 2025-26, Budget at a Glance (Ministry of Finance)