Read the two statements and choose the correct option.

I. The fiscal deficit includes the revenue deficit.

II. The fiscal deficit can never be smaller than the revenue deficit.

Explanation

1. 01

   FD = RD + capital expenditure − non-debt capital receipts, so the revenue deficit is part of it. I is true.

2. 02

   If non-debt capital receipts exceed capital expenditure, FD can be smaller than RD. II is false.