WBCS.LIVE practice question

What is 'Primary Deficit' in the Union Budget of India?

Solve this multiple-choice question and check the correct answer with its explanation below.

Answer options

  1. Total expenditure minus total receipts
  2. Fiscal Deficit minus interest payments
  3. Revenue Deficit minus grants to states
  4. Fiscal Deficit minus subsidies

Correct answer and explanation

Correct answer: Fiscal Deficit minus interest payments

Explanation: āœ… Correct Answer: B) Fiscal Deficit minus interest payments šŸ“š Explanation: Primary Deficit indicates the government's borrowing requirements excluding the interest burden on previous loans. It shows how much of the current fiscal deficit is due to current expenditures rather than past liabilities. A shrinking primary deficit is often seen as a sign of improving fiscal health and better current expenditure management.