QUESTION

Hard

Economy

Prelims 2025

A country’s fiscal deficit stands at ₹50,000 crores. It is receiving ₹10,000 crores through non-debt creating capital receipts. The country’s interest liabilities are ₹1,500 crores. What is the gross primary deficit?

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Explanation

Fiscal Deficit represents the government's total borrowing requirement, while the Primary Deficit shows how much the government is borrowing excluding interest payments on past debt.

Formula: Primary Deficit = Fiscal Deficit − Interest Payments

Given:

  • Fiscal Deficit = ₹50,000 crores
  • Interest Liabilities = ₹1,500 crores
  • Non-debt capital receipts are already factored into the fiscal deficit, so no need to adjust further.

Calculation: Primary Deficit = ₹50,000 − ₹1,500 = ₹48,500 crores

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