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Question
Primary deficit equals : (Choose the correct alternative)
(a) Borrowings
(b) Interest payments
(c) Borrowings less interest payments
(d) Borrowings and interest payments both
Solution
The correct option is (c). Primary deficit is the difference between the fiscal deficit and interest payment. It determines the amount of borrowing which is necessary for the government to pay for the expenses other than interest payments.
Primary deficit = Fiscal deficit − Interest payment
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RELATED QUESTIONS
What is primary deficit?
Primary deficit in a government budget is : (Choose the correct alternative)
a. Revenue expenditure - Revenue receipts
b. Total expenditure - Total receipts
c. Revenue deficit - Interest payments
d. Fiscal deficit - Interest payments
Primary deficit in a government budget equals : (Choose the correct alternative)
a. Interest payments
b. Interest payments less borrowings
c. Borrowings less interest payments
d. None of the above
From the following data about a Government budget, find out (a) Revenue deficit, (b) Fiscal deficit and (c) Primary deficit:
|
S. No. |
Items |
(Rs Arab) |
|
(i) |
Capital receipts net of borrowings |
95 |
|
(ii) |
Revenue expenditure |
100 |
|
(iii) |
Interest payments |
10 |
|
(iv) |
Revenue receipts |
80 |
|
(v) |
Capital expenditure |
110 |
Choose the correct answer from given options
Primary deficit in a government budget will be zero when ________
Primary deficit is borrowing requirements of the government for payment(s) ______.
