ECONOMICS (CBSE/UGC NET)

Detailed explanation-1: -Primary deficit= Total revenue-Total expenditure excluding interest payments on its debt. Primary deficit = Fiscal deficit-Interest payment. The interest payment will be the payment that a government makes on borrowings to the creditors.

Detailed explanation-2: -Net Primary deficit = Fiscal deficit + Interest received – Interest payments It shows the total amount that the central government needs to borrow.

Detailed explanation-3: -While Fiscal Deficit represents the government’s total borrowing including interest payments, Primary Deficit shows the amount of borrowing excluding interest payments.

Detailed explanation-4: -Revenue deficit: Revenue expenditure as reduced by revenue receipts. Fiscal Deficit: Total expenditure as reduced by total receipts except borrowings. Primary Deficit: Fiscal deficit as reduced by interest payments. Effective Revenue Deficit: Revenue deficit as reduced by grants for the creation of capital assets.

Detailed explanation-5: -Primary deficit includes interest payment on previous borrowings. 1 Answer.