Which of the following statement is true?
Answer & explanation
Correct answer: option 1
The correct answer is Option 1: Primary deficit refers to the difference between fiscal deficit of the current year and interest payments on the previous borrowings.
Primary deficit = Fiscal deficit - interest payments
Primary deficit refers to the difference between fiscal deficit of the current year and interest payments on the previous borrowings. It indicates the amount of borrowings required to meet expenditure other than the interest payments.