After deducting grants for the creation of capital assets from revenue deficit, we arrive at :

Correct option is D

• Effective revenue deficit is defined as the difference between revenue deficit and grants for creation of capital assets. 

• Effective revenue deficit signifies that amount of capital receipts that are being used for actual consumption expenditure of the Government. 

• The concept of effective revenue deficit has been initiated from the Union Budget for the financial year 2011-12. The main objective to introduce this type of deficit concept is to denote constructive imbalances of revenue accounts. 

• It was included in the Fiscal Responsibility and Budget Management Act, 2003 through an amendment in 2012. 

• In Budget Estimates 2022-23 the effective Revenue deficit is estimated at 2.6 percent of GDP whereas in revised estimates of 2021-22 it was at 3.7 percent of GDP.

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