A country’s fiscal deficit stands at ₹50,000 crores. It is receiving ₹10,000 crores through non-debt creating

Question

A country’s fiscal deficit stands at ₹50,000 crores. It is receiving ₹10,000 crores through non-debt creating capital receipts. The country’s interest liabilities are ₹1,500 crores. What is the gross primary deficit?

Accepted Answer

The gross primary deficit is calculated by subtracting the current period's interest payments from the fiscal deficit. The fiscal deficit represents the total borrowing requirement of the government. Interest payments are a part of the government's expenditure but do not require fresh borrowing for the primary activities of the government.