Question

Primary deficit = Fiscal deficit –

• A. Interest payment
• B. Revenue deficit
• C. Revenue receipts
• D. Interest received

Answer 1

The correct option is A Interest payment

Fiscal deficit is the difference between the government’s total expenditure and its total receipt, excluding borrowing. Since they are borrowings, they always carry the interest payable on them. The primary deficit accounts for interest payments too. Primary deficit is the difference between fiscal deficit and interest payment of the previous years.