Question

The interest requirement as per the government budget during a year are ₹1,40,000 crores. If total borrowing requirements of the government are estimated at 2,70,000 crores, then how much is a primary deficit.

Answer 1

Total borrowing requirements of the government are estimated at ₹ 2,70,000 crores.

It means, Fiscal deficit = ₹ 2,70,000

Primary deficit = Fiscal Deficit – Interest Payment

Primary Deficit = ₹ 2,70,000 crores – ₹ 1,40,000 crores

= ₹ 1,30,000 crores.