CA Foundation · Business Economics · Public Finance
Government data (Rs crore): revenue receipts 30,000; non-debt capital receipts 2,000; total expenditure 45,000; interest payments 6,000. What is the primary deficit?
The primary deficit is Rs 7,000 crore. Fiscal deficit is total expenditure of 45,000 minus non-borrowing receipts of 32,000, which is 13,000. Subtracting interest payments of 6,000 gives the primary deficit of Rs 7,000 crore.
- ARs 7,000 croreCorrect
- BRs 13,000 crore
- CRs 19,000 crore
- DRs 9,000 crore
Explanation
Fiscal deficit = total expenditure - (revenue receipts + non-debt capital receipts) = 45,000 - 32,000 = 13,000. Primary deficit = fiscal deficit - interest payments = 13,000 - 6,000 = Rs 7,000 crore. Rs 13,000 crore is the fiscal deficit, ignoring the interest adjustment.
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