Payment of interest by the government during the year is estimated to be Rs. 75,000 while the excess of budgetary expenditure over budgetary receipts (net of borrowing) is estimated to be Rs. 1,15,000. Find primary deficit.

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Solution

Fiscal Deficit = Rs. 1,15,000

Interest Payment = Rs. 75,000

Primary Deficit = Fiscal deficit - Interest payment

= Rs. 1,15,000 - Rs. 75,000

= Rs. 40,000

Primary deficit = Rs. 40,000

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Payment of interest by the government during the year is estimated to be Rs. 75,000 while the excess of budgetary expenditure over budgetary receipts (net of borrowing) is estimated to be Rs. 1,15,000. Find primary deficit.

Fiscal Deficit = Rs. 1,15,000 Interest Payment = Rs. 75,000 Primary Deficit = Fiscal deficit - Interest payment = Rs. 1,15,000 - Rs. 75,000 = Rs. 40,000 Primary deficit = Rs. 40,000

Fiscal Deficit = Rs. 1,15,000

Interest Payment = Rs. 75,000

Primary Deficit = Fiscal deficit - Interest payment

= Rs. 1,15,000 - Rs. 75,000

= Rs. 40,000

Primary deficit = Rs. 40,000