NISM Certifications · NISM-Series-XV: Research Analyst · Economic Analysis
An economy's fiscal deficit is Rs 16 lakh crore, interest payments are Rs 10 lakh crore, and total expenditure is Rs 48 lakh crore with non-debt receipts of Rs 32 lakh crore. What is the primary deficit?
The primary deficit is Rs 6 lakh crore. It equals the fiscal deficit of Rs 16 lakh crore less interest payments of Rs 10 lakh crore. Adding interest instead of subtracting it would wrongly give Rs 26 lakh crore.
- ARs 26 lakh crore
- BRs 16 lakh crore
- CRs 6 lakh croreCorrect
- DRs 22 lakh crore
Explanation
Fiscal deficit = 48 - 32 = 16, consistent with the data. Primary deficit = fiscal deficit - interest payments = 16 - 10 = Rs 6 lakh crore. Adding interest gives 26, a sign error; 16 is the fiscal deficit itself.
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