Question

Find (a) Fiscal deficit and (b) Primary deficit from the following:

Particulars	(₹in crores)
Revenue Expenditure	70,000
Borrowings	15,000
Revenue Receipt	50,000
Interest Payment	25% of Revenue Deficit

Answer 1

Revenue deficit = Revenue expenditure – Revenue receipt

Revenue deficit = ₹70,000 crores – ₹50,000 crores = ₹20,000 crores

Interest payment = 25% of revenue deficit = ₹ 20,000 crores x 25/100 = ₹5,000 crores

1. Fiscal deficit = Borrowings = ₹ 15,000 crores

2. Primary deficit = Fiscal deficit – Interest payment

Primary deficit = ₹15,000 crores – 5,000 crores

= 10,000 crores