Effective Revenue Deficit was introduced in the government budgeting during which year?

Correct option is D

The correct answer is (D) 2011-12

Explanation:

• The Effective Revenue Deficit (ERD) was introduced in the Union Budget of 2011-12 by the then Finance Minister, Pranab Mukherjee.
• The ERD was introduced to provide a better reflection of the fiscal health of the government, focusing on the revenue deficit excluding the impact of capital expenditure on the creation of productive assets.
• The objective was to ensure that the deficit being reported was not caused by non-productive or non-investment expenditures, improving the fiscal responsibility framework.

Information Booster:

• The introduction of ERD aimed at improving the quality of fiscal deficits and focusing on non-productive government expenditures.
• The measure became part of a broader effort to encourage better governance and fiscal discipline.