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

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The correct answer is option A. The primary deficit is a key indicator of fiscal health, representing the government's borrowing requirement excluding interest payments on past debts. It is calculated as: Primary Deficit = Fiscal Deficit - Interest Payments. Given: Fiscal Deficit = Rs. 50,000 crores. Interest Liabilities (Interest Payments) = Rs. 1,500 crores. Therefore, Gross Primary Deficit = Rs. 50,000 crores - Rs. 1,500 crores = Rs. 48,500 crores. The non-debt creating capital receipts (Rs. 10,000 crores) are already accounted for in the calculation of the fiscal deficit and are not directly used in the primary deficit calculation from a given fiscal deficit figure. Understanding government budget concepts and deficit calculations is fundamental for UPSC Economy.

Q75. A country's fiscal deficit stands at Rs.50,000 crores. It is receiving Rs.10,000 crores through non-debt creating capital receipts. The country's interest liabilities are Rs.1,500 crores. What is the gross primary deficit?

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