Practicing Success
Which of the following is the formulae to calculate "Fiscal deficit"? |
Fiscal deficit = Total expenditure - Total receipts ( Excluding borrowings ) Fiscal deficit = Primary deficit + Interest payments Both 1 and 2 Neither 1 and 2 |
Both 1 and 2 |
The correct answer is option 3: Both 1 and 2 Fiscal deficit is the difference between the government’s total expenditure and its total receipts excluding borrowing. Gross fiscal deficit = Total expenditure – (Revenue receipts + Non-debt creating capital receipts) or
Fiscal deficit = Total expenditure - Total receipts ( Excluding borrowings ) Similarly, Primary deficit = Fiscal deficit - Interest payments. Thus, Fiscal deficit = Primary deficit + Interest payments |