Consider the data about a government budget and answer the following:
What is primary deficit?
Answer & explanation
Correct answer: option 2
The correct answer is option 2: ₹10,000 crore
Primary deficit = Fiscal deficit – Interest payments
Primary deficit = ₹ 15,000 crores – ₹5,000 crores
Primary deficit = ₹ 10,000 crores
Note:-
- Fiscal deficit is same as borrowings i.e. ₹15000
- Interest payments are 25% of revenue deficit i.e. ₹ 70,000 - ₹ 50,000 = 20,000