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Question

Calculate (a) Revenue Deficit, (b) Fiscal Deficit and (b) Primary Deficit from the following data:
Particulars(Rs. in Crore)
(i) Revenue Expenditure45,000
(ii) Borrowings12,000
(iii) Revenue Receipts35,000
(iv) Interest Payments30% of Revenue Deficit

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Solution

a) Revenue deficit = revenue expenditure - revenue receipts = 45000 - 35000 = 10000
b) Fiscal deficit is equivalent to borrowings. Therefore, fiscal deficit = 12000
c) Primary deficit = fiscal deficit - interest payments = 12000 - (30 *10000) = 12000 - 3000 = 9000

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