Concept:Revenue deficit occurs when the government’s revenue expenditure exceeds its revenue receipts, forcing it to borrow for day-to-day expenses that do not create capital assets.
Explanation:Revenue deficit = Revenue expenditure − Revenue receipts.
It shows that the government’s own income is insufficient for routine operations.
To bridge this gap, the government must borrow or use capital receipts (like asset sales).
These borrowings are used only for current expenses, not for building productive assets.
Thus, revenue deficit implies borrowing for non-capital-creating expenses.
Answer:B. the Indian Government needs to borrow in order to finance its expenses which do not create Capital assets