Practicing Success
Which of the following gives the correct measure of "Primary deficit"? |
Revenue deficit - Fiscal deficit Revenue deficit - Interest payments Difference between Capital and Revenue expenditure Fiscal deficit - Interest payments |
Fiscal deficit - Interest payments |
Primary deficit refers to the difference between the current year's fiscal deficit and interest payment on previous borrowings. It indicates the borrowing requirements of the government, excluding interest. It also shows how much of the government's expenses, other than interest payment, can be met through borrowings. Primary deficit = Fiscal deficit - Interest payments |