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Primary deficit of the government is obtained by:

Primary deficit equals the fiscal deficit minus interest payments. It indicates how much the government must borrow to meet its current expenditure excluding the burden of interest on earlier borrowings, so it isolates the present year's fiscal imbalance.

  1. AFiscal deficit minus interest paymentsCorrect
  2. BFiscal deficit plus interest payments
  3. CRevenue deficit minus capital expenditure
  4. DRevenue deficit plus interest payments

Explanation

Primary deficit = fiscal deficit − interest payments. It shows borrowing needed for current-year spending apart from servicing past debt. Adding interest instead would overstate it, and revenue deficit is not the starting point.

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