Which of the given options would result in an increase in gross fiscal deficit?

Correct option is C

The correct answer is (C)  Decrease in revenue receipts

• ​A Gross Fiscal Deficit (GFD) occurs when a government’s total spending decrease its total income.
• It includes all borrowings, whether from the Reserve Bank of India (RBI) or international sources.​

Information booster:

Gross Fiscal Deficit (GFD

• High Government Spending: Increased spending on programs, infrastructure, defense, or social services without a matching rise in revenue can widen the deficit.
• Low Revenue: Poor tax collection or slower economic growth can reduce the government's income.
• Economic Slowdowns: During economic downturns, reduced business activity often results in lower tax revenues.
• War or Natural Disasters: Emergencies like wars or natural disasters require substantial expenditure, contributing to the deficit.
• Social Welfare Programs: Spending on welfare schemes, subsidies, and social support increases the deficit.
• Interest Payments on Debt: The cost of paying interest on existing loans can further add to the fiscal deficit.