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Question

Calculate Revenue Deficit, Fiscal Deficit and Primary Deficit from the following data:

Items (Rs in crore)

(i) Revenue expenditure 22,250

(ii) Capital expenditure 28,000

(iii) Revenue receipts 17,750

(iv) Capital receipts (net of borrowing) 20,000

(v) Interest payments 5,000

(vi) Borrowings 12,500

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Solution

1. Revenue Deficit = Revenue expenditure - Revenue receipts

= Rs. 22,250 crore - Rs. 17,750 crore

= Rs. 4,500 crore

2. Fiscal deficit = Revenue expenditure + Capital expenditure - Revenue receipts - Capital receipts (net of borrowings) = Borrowings = Rs. 12,500 crore

3. Primary Deficit = Fiscal deficit - Interest payments

= Rs. 12,500 crore - Rs. 5,000 crore

= Rs. 7,500 crore

Revenue deficit = Rs. 4,500 crore

Fiscal deficit = Rs. 12,500 crore

Primary deficit = Rs. 7,500 crore


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