Q. 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?

(a) Rs.48,500 crores

(b) Rs.51,500 crores

(d) None of the above

Ans-a

Explanation

Gross primary deficit = Gross fiscal deficit – Net interest liabilities (50000-1500=48500 crore)

Net interest liabilities consist of interest payments minus interest receipts by the government on net domestic lending

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