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Which of following statement is true about the Primary deficit?
- a)It is difference between Revenue receipts and Revenue Expenditure
- b)It is difference between capital receipts and Interest Payment
- c)It is difference between the Fiscal Deficit and Interest Payment
- d)It is addition of Fiscal Deficit and Interest Payment
Correct answer is option 'C'. Can you explain this answer?
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Most Upvoted Answer
Which of following statement is true about the Primary deficit?a)It is...
Primary Deficit
The Primary Deficit is an important measure of a government's fiscal health. It is the difference between the Fiscal Deficit and Interest Payment.
Fiscal Deficit
The Fiscal Deficit is the difference between the government’s total expenditure and total revenue, including both capital and revenue expenditure.
Interest Payment
Interest Payment is the amount of money the government pays in interest on its outstanding debt.
Calculation of Primary Deficit
Primary Deficit = Fiscal Deficit - Interest Payment
The primary deficit measures the government's fiscal position without taking into account the interest payments on its outstanding debt.
Importance of Primary Deficit
The primary deficit is an important metric for assessing a government's fiscal health because it shows whether the government is able to meet its current expenditure obligations without relying on borrowed funds.
A primary deficit indicates that the government is spending more than its revenue, excluding interest payments, and is therefore increasing its debt burden. In contrast, a primary surplus indicates that the government is generating enough revenue to cover its expenditure, excluding interest payments, and is therefore reducing its debt burden.
Conclusion
The primary deficit is an important metric for assessing a government's fiscal health, as it shows whether the government is able to meet its current expenditure obligations without relying on borrowed funds. It is the difference between the Fiscal Deficit and Interest Payment, and a primary surplus indicates that the government is generating enough revenue to cover its expenditure, excluding interest payments, and is therefore reducing its debt burden.
The Primary Deficit is an important measure of a government's fiscal health. It is the difference between the Fiscal Deficit and Interest Payment.
Fiscal Deficit
The Fiscal Deficit is the difference between the government’s total expenditure and total revenue, including both capital and revenue expenditure.
Interest Payment
Interest Payment is the amount of money the government pays in interest on its outstanding debt.
Calculation of Primary Deficit
Primary Deficit = Fiscal Deficit - Interest Payment
The primary deficit measures the government's fiscal position without taking into account the interest payments on its outstanding debt.
Importance of Primary Deficit
The primary deficit is an important metric for assessing a government's fiscal health because it shows whether the government is able to meet its current expenditure obligations without relying on borrowed funds.
A primary deficit indicates that the government is spending more than its revenue, excluding interest payments, and is therefore increasing its debt burden. In contrast, a primary surplus indicates that the government is generating enough revenue to cover its expenditure, excluding interest payments, and is therefore reducing its debt burden.
Conclusion
The primary deficit is an important metric for assessing a government's fiscal health, as it shows whether the government is able to meet its current expenditure obligations without relying on borrowed funds. It is the difference between the Fiscal Deficit and Interest Payment, and a primary surplus indicates that the government is generating enough revenue to cover its expenditure, excluding interest payments, and is therefore reducing its debt burden.
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Community Answer
Which of following statement is true about the Primary deficit?a)It is...
Option C : It is difference between the Fiscal Deficit and Interest Payment.
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Which of following statement is true about the Primary deficit?a)It is difference between Revenue receipts and RevenueExpenditureb)It is difference between capital receipts and Interest Payment c)It is difference between the Fiscal Deficit and Interest Paymentd)It is addition of Fiscal Deficit and Interest PaymentCorrect answer is option 'C'. Can you explain this answer?
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Which of following statement is true about the Primary deficit?a)It is difference between Revenue receipts and RevenueExpenditureb)It is difference between capital receipts and Interest Payment c)It is difference between the Fiscal Deficit and Interest Paymentd)It is addition of Fiscal Deficit and Interest PaymentCorrect answer is option 'C'. 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 following statement is true about the Primary deficit?a)It is difference between Revenue receipts and RevenueExpenditureb)It is difference between capital receipts and Interest Payment c)It is difference between the Fiscal Deficit and Interest Paymentd)It is addition of Fiscal Deficit and Interest PaymentCorrect answer is option 'C'. 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 following statement is true about the Primary deficit?a)It is difference between Revenue receipts and RevenueExpenditureb)It is difference between capital receipts and Interest Payment c)It is difference between the Fiscal Deficit and Interest Paymentd)It is addition of Fiscal Deficit and Interest PaymentCorrect answer is option 'C'. Can you explain this answer?.
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Which of following statement is true about the Primary deficit?a)It is difference between Revenue receipts and RevenueExpenditureb)It is difference between capital receipts and Interest Payment c)It is difference between the Fiscal Deficit and Interest Paymentd)It is addition of Fiscal Deficit and Interest PaymentCorrect answer is option 'C'. Can you explain this answer?, a detailed solution for Which of following statement is true about the Primary deficit?a)It is difference between Revenue receipts and RevenueExpenditureb)It is difference between capital receipts and Interest Payment c)It is difference between the Fiscal Deficit and Interest Paymentd)It is addition of Fiscal Deficit and Interest PaymentCorrect answer is option 'C'. Can you explain this answer? has been provided alongside types of Which of following statement is true about the Primary deficit?a)It is difference between Revenue receipts and RevenueExpenditureb)It is difference between capital receipts and Interest Payment c)It is difference between the Fiscal Deficit and Interest Paymentd)It is addition of Fiscal Deficit and Interest PaymentCorrect answer is option 'C'. Can you explain this answer? theory, EduRev gives you an
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