In the context of public finance, 'Vertical Fiscal Imbalance' refers to:
A. Mismatch between revenue-raising powers and expenditure responsibilities across different levels of government
B. Imbalance between revenue and expenditure of the same level of government
C. Only the primary deficit
D. Imbalance between capital and revenue budgets only
Answer: Option A
Solution (By JKSSB Mock Tests)
Vertical fiscal imbalance arises when the revenue powers and expenditure responsibilities of different tiers of government (Centre and States) are mismatched.
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