CSEET · Economic and Business Environment · Indian Union Budget
Primary deficit of the Union Government is best described as:
Primary deficit is the fiscal deficit less interest payments. It shows how much the government must borrow to meet its current spending apart from interest on earlier debt. If it is zero, borrowing is needed only to pay interest on past borrowings.
- AFiscal deficit minus interest paymentsCorrect
- BRevenue deficit minus capital expenditure
- CFiscal deficit plus interest payments
- DTotal expenditure minus tax revenue
Explanation
Primary deficit = fiscal deficit - interest payments. It shows the borrowing needed for current-year spending excluding the burden of interest on past debt. Adding interest would overstate it, and the other options do not define any standard deficit measure.
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