Economics • Indian EconomyMedium
What does the term 'Primary Deficit' mean in the context of the Union Budget of India?
A. Fiscal deficit minus interest payments on previous borrowings.✓ Correct Answer
B. Revenue deficit plus capital expenditure.
C. Total government expenditure minus total non-debt tax receipts.
D. The net borrowing requirement of the central government excluding state grants.
💡 Solution & Explanation
Primary deficit is calculated as the fiscal deficit minus interest payments on previous borrowings, reflecting the government's borrowing needs independent of past debt-servicing burdens. Measures like revenue deficit focus exclusively on operational receipts and expenditures. Budgetary definitions are essential for economic policy questions.
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