Economics • Indian EconomyEasy
Which of the following defines 'Primary Deficit' in government budgetary transactions?
A. Fiscal deficit minus interest payments✓ Correct Answer
B. Revenue deficit plus capital expenditure
C. Total expenditure minus total tax revenue
D. Borrowings from the central bank minus foreign exchange reserves
💡 Solution & Explanation
Primary deficit is calculated by subtracting interest payments on past borrowings from the fiscal deficit, reflecting the government's borrowing requirements exclusive of servicing previous debt. Total expenditure minus tax revenue defines other deficit metrics rather than the primary deficit. Budgetary concepts and fiscal indicators are frequently evaluated in economics papers.
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