Option 2: (A) - (II), (B) - (I), (C) - (III), (D) - (IV) -> Let's understand each match:
(A) Primary deficit = (II) Fiscal deficit – Net interest liabilities: Primary deficit excludes interest payments from fiscal deficit, showing the gap excluding debt servicing costs.
(B) Fiscal deficit = (I) Net borrowing at home + Borrowing from RBI + Borrowing from abroad: Fiscal deficit represents the total borrowing requirement of the government from all sources.
(C) Revenue deficit = (III) Revenue expenditure – Revenue receipts: Revenue deficit shows the excess of government's day-to-day spending over its regular income.
(D) Revenue Expenditure = (IV) Plan and non-plan expenditure: Revenue expenditure includes both plan and non-plan revenue spending on routine operations like salaries, subsidies, and interest payments.
This matching correctly aligns all fiscal terminology with their proper definitions. -> correct