A country’s fiscal deficit stands at ₹50,000 crores. It is receiving ₹10,000 crores through non-debt creating capital receipts. The country’s interest liabilities are ₹1,500 crores. What is the gross primary deficit?
A country’s fiscal deficit stands at ₹50,000 crores. It is receiving ₹10,000 crores through non-debt creating capital receipts. The country’s interest liabilities are ₹1,500 crores. What is the gross primary deficit?
Answer:
(a)
Easy
Application Based
Core Books/NCERT
To calculate the Gross Primary Deficit we use the following formula: Primary Deficit = Fiscal Deficit – Interest Payments Fiscal Deficit = ₹50,000 crores Interest Liabilities = ₹1,500 crores Primary Deficit = ₹50,000 – ₹1,500 = ₹48,500 crores The ₹10,000 crores of non-debt capital receipts are **not used in this calculation** directly — they’re part of how the fiscal deficit is financed, not how the primary deficit is calculated. Correct Answer: (a) ₹48,500 crores