From the following data, Calculate Primary Deficit.
|
|
₹ (crore) |
|
Revenue expenditure |
22,250 |
|
Capital expenditure |
28,000 |
|
Revenue receipts |
17,750 |
|
Capital receipts (net of borrowing) |
20,000 |
|
Interest payment |
5,000 |
|
Borrowings |
12,500 |
Answer & explanation
Correct answer: option 1
Primary Deficit=Fiscal Deficit−Interest Payments
Fiscal deficit is the difference between the government’s total expenditure and its total receipts excluding borrowing.
Let's calculate it using the provided data:
-
Fiscal Deficit =Total Expenditure−Total Receipts
=(Revenue Expenditure+Capital Expenditure)−(Revenue Receipts+Capital Receipts (net of borrowing))
=(22,250+28,000)−(17,750+20,000)
=50,250−37,750
=12,500 crore
-
Primary Deficit =Fiscal Deficit−Interest Payments
=12,500−5,000
=7,500 crore
Therefore, the primary deficit is ₹7,500 crore.