UPSC Exam > UPSC Questions > Which of the following statements best descri...
Start Learning for Free
Which of the following statements best describes the primary deficit?
- a)It refers to the excess of government’s revenue expenditure over revenue receipts.
- b)It is the fiscal deficit of the current year minus interest payments on previous borrowings.
- c)It is the difference between revenue deficit and grants for creation of capital assets.
- d)It is the excess of total expenditure over total receipts excluding borrowings.
Correct answer is option 'B'. Can you explain this answer?
| FREE This question is part of | Download PDF Attempt this Test |
Most Upvoted Answer
Which of the following statements best describes the primary deficit?a...
Primary Deficit Explanation:
The primary deficit is a crucial concept in public finance and government budgeting. It is important to understand this term in order to analyze the financial health and sustainability of a government's budget.
Definition:
The primary deficit is calculated as the fiscal deficit of the current year minus interest payments on previous borrowings. In simpler terms, it represents the deficit before accounting for interest payments on past borrowings.
Importance:
The primary deficit gives a clearer picture of the government's fiscal position by excluding the influence of interest payments. This allows policymakers and analysts to focus on the government's current spending and revenue situation, without being skewed by past debt obligations.
Significance:
- It indicates the government's ability to meet its current spending obligations without relying on borrowing.
- A high primary deficit may signal financial instability and the need for fiscal consolidation measures.
- It is used as a key indicator of the government's fiscal discipline and sustainability.
Calculation:
Primary Deficit = Fiscal Deficit - Interest Payments on Previous Borrowings
In conclusion, the primary deficit is a critical metric in assessing a government's fiscal health and sustainability. By focusing on current spending and revenue dynamics, it provides valuable insights into the government's ability to manage its finances effectively.
The primary deficit is a crucial concept in public finance and government budgeting. It is important to understand this term in order to analyze the financial health and sustainability of a government's budget.
Definition:
The primary deficit is calculated as the fiscal deficit of the current year minus interest payments on previous borrowings. In simpler terms, it represents the deficit before accounting for interest payments on past borrowings.
Importance:
The primary deficit gives a clearer picture of the government's fiscal position by excluding the influence of interest payments. This allows policymakers and analysts to focus on the government's current spending and revenue situation, without being skewed by past debt obligations.
Significance:
- It indicates the government's ability to meet its current spending obligations without relying on borrowing.
- A high primary deficit may signal financial instability and the need for fiscal consolidation measures.
- It is used as a key indicator of the government's fiscal discipline and sustainability.
Calculation:
Primary Deficit = Fiscal Deficit - Interest Payments on Previous Borrowings
In conclusion, the primary deficit is a critical metric in assessing a government's fiscal health and sustainability. By focusing on current spending and revenue dynamics, it provides valuable insights into the government's ability to manage its finances effectively.
Free Test
FREE
| Start Free Test |
Community Answer
Which of the following statements best describes the primary deficit?a...
- Primary deficit is fiscal deficit of the current year minus interest payments on previous borrowings. While fiscal deficit represents the government's total borrowing including interest payments, primary deficit shows the amount of borrowing excluding interest payments. Hence option (b) is the correct answer.
- It shows the amount of government borrowings specifically to meet the expenses by removing the interest payments. Therefore, a zero Primary Deficit means the need for borrowing to meet interest payments.
- Fiscal Deficit: The excess of total expenditure over total receipts excluding borrowings is called fiscal deficit. In other words, the fiscal deficit gives the amount needed by the government to meet its expenses. Thus a large fiscal deficit means a large amount of borrowings.
- Revenue Deficit: Revenue deficit is the excess of its total revenue expenditure to its total revenue receipts. Revenue deficit is only related to revenue expenditure and revenue receipts of the government.
- Effective Revenue Deficit: It is the difference between revenue deficit and grants for the creation of capital assets.
Attention UPSC Students!
To make sure you are not studying endlessly, EduRev has designed UPSC study material, with Structured Courses, Videos, & Test Series. Plus get personalized analysis, doubt solving and improvement plans to achieve a great score in UPSC.
|
Explore Courses for UPSC exam
|
|
Similar UPSC Doubts
Top Courses for UPSCView all
Which of the following statements best describes the primary deficit?a)It refers to the excess of government’s revenue expenditure over revenue receipts.b)It is the fiscal deficit of the current year minus interest payments on previous borrowings.c)It is the difference between revenue deficit and grants for creation of capital assets.d)It is the excess of total expenditure over total receipts excluding borrowings.Correct answer is option 'B'. Can you explain this answer?
Question Description
Which of the following statements best describes the primary deficit?a)It refers to the excess of government’s revenue expenditure over revenue receipts.b)It is the fiscal deficit of the current year minus interest payments on previous borrowings.c)It is the difference between revenue deficit and grants for creation of capital assets.d)It is the excess of total expenditure over total receipts excluding borrowings.Correct answer is option 'B'. Can you explain this answer? for UPSC 2024 is part of UPSC preparation. The Question and answers have been prepared according to the UPSC exam syllabus. Information about Which of the following statements best describes the primary deficit?a)It refers to the excess of government’s revenue expenditure over revenue receipts.b)It is the fiscal deficit of the current year minus interest payments on previous borrowings.c)It is the difference between revenue deficit and grants for creation of capital assets.d)It is the excess of total expenditure over total receipts excluding borrowings.Correct answer is option 'B'. Can you explain this answer? covers all topics & solutions for UPSC 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for Which of the following statements best describes the primary deficit?a)It refers to the excess of government’s revenue expenditure over revenue receipts.b)It is the fiscal deficit of the current year minus interest payments on previous borrowings.c)It is the difference between revenue deficit and grants for creation of capital assets.d)It is the excess of total expenditure over total receipts excluding borrowings.Correct answer is option 'B'. Can you explain this answer?.
Which of the following statements best describes the primary deficit?a)It refers to the excess of government’s revenue expenditure over revenue receipts.b)It is the fiscal deficit of the current year minus interest payments on previous borrowings.c)It is the difference between revenue deficit and grants for creation of capital assets.d)It is the excess of total expenditure over total receipts excluding borrowings.Correct answer is option 'B'. Can you explain this answer? for UPSC 2024 is part of UPSC preparation. The Question and answers have been prepared according to the UPSC exam syllabus. Information about Which of the following statements best describes the primary deficit?a)It refers to the excess of government’s revenue expenditure over revenue receipts.b)It is the fiscal deficit of the current year minus interest payments on previous borrowings.c)It is the difference between revenue deficit and grants for creation of capital assets.d)It is the excess of total expenditure over total receipts excluding borrowings.Correct answer is option 'B'. Can you explain this answer? covers all topics & solutions for UPSC 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for Which of the following statements best describes the primary deficit?a)It refers to the excess of government’s revenue expenditure over revenue receipts.b)It is the fiscal deficit of the current year minus interest payments on previous borrowings.c)It is the difference between revenue deficit and grants for creation of capital assets.d)It is the excess of total expenditure over total receipts excluding borrowings.Correct answer is option 'B'. Can you explain this answer?.
Solutions for Which of the following statements best describes the primary deficit?a)It refers to the excess of government’s revenue expenditure over revenue receipts.b)It is the fiscal deficit of the current year minus interest payments on previous borrowings.c)It is the difference between revenue deficit and grants for creation of capital assets.d)It is the excess of total expenditure over total receipts excluding borrowings.Correct answer is option 'B'. Can you explain this answer? in English & in Hindi are available as part of our courses for UPSC.
Download more important topics, notes, lectures and mock test series for UPSC Exam by signing up for free.
Here you can find the meaning of Which of the following statements best describes the primary deficit?a)It refers to the excess of government’s revenue expenditure over revenue receipts.b)It is the fiscal deficit of the current year minus interest payments on previous borrowings.c)It is the difference between revenue deficit and grants for creation of capital assets.d)It is the excess of total expenditure over total receipts excluding borrowings.Correct answer is option 'B'. Can you explain this answer? defined & explained in the simplest way possible. Besides giving the explanation of
Which of the following statements best describes the primary deficit?a)It refers to the excess of government’s revenue expenditure over revenue receipts.b)It is the fiscal deficit of the current year minus interest payments on previous borrowings.c)It is the difference between revenue deficit and grants for creation of capital assets.d)It is the excess of total expenditure over total receipts excluding borrowings.Correct answer is option 'B'. Can you explain this answer?, a detailed solution for Which of the following statements best describes the primary deficit?a)It refers to the excess of government’s revenue expenditure over revenue receipts.b)It is the fiscal deficit of the current year minus interest payments on previous borrowings.c)It is the difference between revenue deficit and grants for creation of capital assets.d)It is the excess of total expenditure over total receipts excluding borrowings.Correct answer is option 'B'. Can you explain this answer? has been provided alongside types of Which of the following statements best describes the primary deficit?a)It refers to the excess of government’s revenue expenditure over revenue receipts.b)It is the fiscal deficit of the current year minus interest payments on previous borrowings.c)It is the difference between revenue deficit and grants for creation of capital assets.d)It is the excess of total expenditure over total receipts excluding borrowings.Correct answer is option 'B'. Can you explain this answer? theory, EduRev gives you an
ample number of questions to practice Which of the following statements best describes the primary deficit?a)It refers to the excess of government’s revenue expenditure over revenue receipts.b)It is the fiscal deficit of the current year minus interest payments on previous borrowings.c)It is the difference between revenue deficit and grants for creation of capital assets.d)It is the excess of total expenditure over total receipts excluding borrowings.Correct answer is option 'B'. Can you explain this answer? tests, examples and also practice UPSC tests.
|
|
Explore Courses for UPSC exam
|
|
Signup for Free!
Signup to see your scores go up within 7 days! Learn & Practice with 1000+ FREE Notes, Videos & Tests.
|
© EduRev
|
Education Revolution
|
Follow Us
|
Signup to see your scores
go up within 7 days!
Access 1000+ FREE Docs, Videos and Tests
Takes less than 10 seconds to signup