A country's fiscal deficit stands at Rs.50,000 crores. It is receiving Rs.10,000 crores through non-

Question

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?

Accepted Answer

Fiscal Deficit = Total Expenditure – (Revenue Receipts + Non-debt Capital Receipts) Gross Primary Deficit = Fiscal Deficit – Interest Payments Thus Gross Primary Deficit = Rs 50,000 crores - Rs 1,500 crores = Rs 48,500 crores