Home › SBI PO › Financial Awareness › Government Budget › Primary deficit is obtained by subtracting which…
Primary deficit is obtained by subtracting which item from the fiscal deficit?
ACapital expenditure
BMajor subsidies
CNet interest liabilities
DTotal tax revenue
Answer & Solution
Correct answer: C. Net interest liabilities
1. Fiscal deficit includes interest owed on debt already accumulated.
2. To see the *current* fiscal imbalance, that interest burden is removed.
3. Primary deficit = fiscal deficit - **net interest liabilities**.
4. Net interest liabilities are interest payments minus interest receipts on net domestic lending.
_Source: NCERT Class 12 Introductory Macroeconomics, Ch 5 "Government Budget and the Economy", section 5.2.1 Measures of Government Deficit_
Related questions
Net borrowing at home reaches commercial banks indirectly through which requirement?Under the excise structure described, which category bears the heaviest tax?Firms in India are taxed on which basis?From which budget did India stop showing the 'budget deficit' as a separate measure?A large revenue deficit as a share of fiscal deficit signals that borrowing is financing mA revenue deficit implies that the government isFiscal deficit can be written as revenue deficit plus capital expenditure minusWith revenue receipts at 9.2 per cent of GDP and revenue expenditure at 11.8 per cent, the