A country's fiscal deficit stands at ₹ 50,000 crores. It is receiving ₹ 10,000 crores through non-debt creating capital receipts. The country's interest liabilities are ₹ 1,500 crores. What is the gross primary deficit?
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Answer: A. Gross primary deficit = gross fiscal deficit - interest payments. So 50,000 - 1,500 = ₹48,500 crore. The ₹10,000 crore of non-debt capital receipts is already counted when the fiscal deficit is worked out, so it is not used again.
Watch for: The non-debt capital receipts figure is a distractor; it is already inside the fiscal deficit.
Why the other options are wrong
- B. ₹51,500 crore wrongly adds interest instead of subtracting it.
- C. ₹58,500 crore wrongly adds the non-debt receipts and subtracts interest.
- D. None is wrong, because ₹48,500 crore is the correct figure.
Source to check: NCERT Class XII 'Introductory Macroeconomics', chapter on Government Budget and the Economy
Answer from the official UPSC key. Written and fact-checked by AI against the official key. Spotted a mistake? Report it.