CMA Final · Corporate Financial Reporting · Government Accounting in India
A State Government's account shows: revenue receipts Rs. 800 crore, revenue expenditure Rs. 760 crore, capital expenditure Rs. 150 crore, non-debt capital receipts Rs. 20 crore, and interest payments Rs. 90 crore (included in revenue expenditure). What is the primary deficit/surplus?
The fiscal deficit is 90 crore, and subtracting interest payments of 90 crore gives a primary balance of zero.
- APrimary deficit of Rs. 40 croreCorrect
- BPrimary deficit of Rs. 130 crore
- CPrimary surplus of Rs. 40 crore
- DPrimary deficit of Rs. 90 crore
Explanation
Fiscal deficit = (760+150) - 800 - 20 = 90. Primary deficit = fiscal deficit - interest payments = 90 - 90 = 0. Recheck: total expenditure 910, receipts 820, gap 90, less interest 90 gives zero, so none of the listed options fits exactly.
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