Question : The primary deficit is calculated as ____________ minus interest payments.
Option 1: Revenue deficit
Option 2: Fiscal deficit
Option 3: Capital receipts
Option 4: Revenue receipts
Correct Answer: Fiscal deficit
Solution : The correct answer is (B) Fiscal deficit minus interest payments.
The primary deficit represents the difference between the government's fiscal deficit and its interest payments. It measures the extent to which the government's total expenditure, excluding interest payments, exceeds its revenue receipts.
The fiscal deficit is the difference between the government's total expenditure and its total revenue, including both revenue receipts and capital receipts. It reflects the overall shortfall in the government's financing and indicates the extent to which the government needs to borrow to fund its expenses.
Interest payments, on the other hand, refer to the payments made by the government on its outstanding debts. These payments represent the cost of borrowing for the government.
By subtracting interest payments from the fiscal deficit, the primary deficit provides a measure of the government's borrowing requirement, excluding the impact of interest payments.
Question : Which of the following is correct.
Option 1: Primary deficit= fiscal deficit + interest payments
Option 2: Revenue deficit= total expenditure - total receipts
Option 3: Fiscal deficit= revenue expenditure - revenue receipts
Option 4: Primary deficit= fiscal deficit - interest payments. Hence, Option D is correct.
Question : The revenue deficit is calculated as ____________ minus revenue receipts.
Option 1: Total expenditure
Option 2: Capital receipts
Option 3: Capital expenditure
Option 4: Fiscal deficit
Question : Gross primary deficit is the difference between ______.
Option 1: revenue deficit and interest receipts
Option 2: gross fiscal deficit and interest receipts
Option 3: revenue deficit and interest payments
Option 4: gross fiscal deficit and net interest liabilities
Question : Identify the incorrect equation.
Option 1: Revenue receipts = Tax revenue (net of State's share) less non-tax revenue
Option 2: Gross fiscal deficit = Total expenditure - (Revenue receipts + Non-debt creating capital receipts)
Option 3: Gross primary deficit = Gross fiscal deficit - Net interest liabilities
Option 4: Revenue deficit = Revenue expenditure - revenue receipts
Question : The gross primary deficit can be expressed as ______.
Option 1: Gross fiscal deficit – Net interest liabilities
Option 2: Capital expenditure – Revenue deficit
Option 3: Gross fiscal deficit + Net interest liabilities
Option 4: Revenue deficit + Capital expenditure
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