Which one of the following expenditures is subtracted from Fiscal Deficit to arrive at Primary Deficit ?
[amp_mcq option1=”Defence expenditure” option2=”Expenditure on subsidies” option3=”Interest payments” option4=”Pension” correct=”option3″]
This question was previously asked in
UPSC CDS-2 – 2023
Primary Deficit is defined as Fiscal Deficit minus Interest Payments on previous borrowings.
Primary Deficit = Fiscal Deficit – Interest Payments
The primary deficit shows the borrowing requirement of the government excluding the interest burden on accumulated past debt. It reflects the current fiscal stance of the government.