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In estimating the budgetary deficit, the official approach in India is to exclude
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- long term borrowing from the market
- borrowings from the Reserve Bank of India
- drawing down of the cash balance
- borrowing from Reserve Bank in the form of ways and means advance
- long term borrowing from the market
Correct Option: C
When the government expenditure exceeds revenues, the government is having a budget deficit. Thus the budget deficit is the excess of government expenditures over government receipts (income). When the government is running a deficit, it is spending more than it’s receipts. Budgetary Deficit is the difference between all receipts and expenditure of the government, both revenue and capital. This difference is met by the net addition of the treasury bills issued by the RBI and drawing down of cash balances kept with the RBI. So when it is estimated, drawing down of cash balances is excluded.
