NISM Certifications · NISM-Series-XV: Research Analyst · Economic Analysis
An economy has a fiscal deficit of Rs 16 lakh crore. Its total receipts excluding borrowings are Rs 30 lakh crore, and interest payments are Rs 10 lakh crore. What is the primary deficit?
The primary deficit is Rs 6 lakh crore, found by subtracting interest payments of Rs 10 lakh crore from the fiscal deficit of Rs 16 lakh crore. Adding them or ignoring interest gives wrong figures, and receipts are not needed.
- ARs 6 lakh croreCorrect
- BRs 26 lakh crore
- CRs 16 lakh crore
- DRs 4 lakh crore
Explanation
Primary deficit = fiscal deficit minus interest payments = 16 - 10 = Rs 6 lakh crore. Rs 26 lakh crore adds interest instead of subtracting it. Rs 16 lakh crore is the fiscal deficit itself. Receipts are not needed for this calculation.
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