CA Foundation P4 · Chapter 7 · Question 11 of 15
A government's budget shows (Rs. crore): revenue receipts 900; non-debt capital receipts 50; total expenditure 1,400, of which interest payments are 300. Fiscal deficit and primary deficit respectively are:
Test yourself: pick an answer
Reveal answer & explanation
Correct answer: B) Rs. 450 crore and Rs. 150 crore
Explanation
Fiscal deficit = 1,400 - (900 + 50) = Rs. 450 crore. Primary deficit = fiscal deficit - interest payments = 450 - 300 = Rs. 150 crore. Rs. 500/200 crore ignores non-debt capital receipts; Rs. 750 crore wrongly adds interest.
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