A country’s fiscal deficit stands at ₹50,000 crores. It is receiving ₹10,000 crores through non-debt creating capital receipts. The country’s interest liabilities are ₹1,500 crores. What is the gross primary deficit?
Correct answer: A
Explanation
Fiscal Deficit represents the government's total borrowing requirement, while the Primary Deficit shows how much the government is borrowing excluding interest payments on past debt.
Formula: Primary Deficit = Fiscal Deficit − Interest Payments
Given:
* Fiscal Deficit = ₹50,000 crores * Interest Liabilities = ₹1,500 crores * Non-debt capital receipts are already factored into the fiscal deficit, so no need to adjust further.
Calculation: Primary Deficit = ₹50,000 − ₹1,500 = ₹48,500 crores