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Under a fiscal consolidation path, the government's fiscal deficit is Rs 16,00,000 crore and interest payments are Rs 10,00,000 crore. What is the primary deficit?
The primary deficit is Rs 6,00,000 crore. It is found by subtracting interest payments of Rs 10,00,000 crore from the fiscal deficit of Rs 16,00,000 crore. This shows borrowing needed for current non-interest spending, excluding the burden of past debt servicing.
- ARs 26,00,000 crore
- BRs 6,00,000 croreCorrect
- CRs 10,00,000 crore
- DRs 1,60,00,000 crore
Explanation
Primary deficit = fiscal deficit minus interest payments = 16,00,000 - 10,00,000 = Rs 6,00,000 crore. Adding them (Rs 26,00,000 crore) is the sign error. Check: 6,00,000 + 10,00,000 = 16,00,000.
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