Receipts and Expenditure of the Central Government, 2020-21
|
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(As per cent of GDP) |
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1. Revenue Receipts (a+b) (a) Tax revenue (net of states share) (b) Non-tax revenue |
9.0 7.3 1.7 |
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2. Revenue Expenditure of which (a) Interest payments (b) Major Subsidies (c) Defence expenditure |
11.7 3.1 1.0 0.9 |
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3. Revenue Deficit (2-1) |
2.7 |
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4. Capital Receipts (a+b+c) (a) Recovery of loans (b) Other receipts (mainly PSU disinvestment) (c) Borrowings and other liabilities |
4.5 0.1 0.9 3.5 |
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5. Capital Expenditure |
1.8 |
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6. Non-debt Receipts [2+5=7(a)+7(b)] |
10.0 |
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7. Total Expenditure [2+5=7(a)+7(b)] (a) Plan expenditure (b) Non-plan expenditure |
13.5 - - |
|
8. Fiscal deficit [7-1-4(a)-4(b)] |
3.5 |
|
Primary Deficit [8-2(a)] |
0.4 |
Primary deficit equals:
Answer & explanation
Correct answer: option 4
The correct answer is Option (4) → Fiscal deficit - interest payments
Primary Deficit: The borrowing requirement of the government includes interest obligations on accumulated debt. The goal of measuring primary deficit is to focus on present fiscal imbalances. To obtain an estimate of borrowing on account of current expenditures exceeding revenues, we need to calculate what has been called the primary deficit. It is simply the fiscal deficit minus the interest payments.
Gross primary deficit = Gross fiscal deficit – Net interest liabilities
Net interest liabilities consist of interest payments minus interest receipts by the government on net domestic lending.