by Q. 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?
UPSC Civil Services Examination (Prelims) 2025 – General Studies Paper I
(a) ₹48,500 crores
(b) ₹51,500 crores
(c) ₹58,500 crores
(d) None of the above
Answer: (a) ₹48,500 crores
Explanation:
To calculate the Gross Primary Deficit, the following standard formula is used:
Gross Primary Deficit = Fiscal Deficit − Interest Payments
Given data:
- Fiscal Deficit = ₹50,000 crore
- Interest Payments (Interest Liabilities) = ₹1,500 crore
It is important to note that non-debt creating capital receipts are not required for calculating the primary deficit. These receipts are relevant for understanding how the fiscal deficit is financed, but they do not influence the computation of the primary deficit, which focuses only on current fiscal imbalance excluding past debt obligations.
Calculation:
Gross Primary Deficit = 50,000 − 1,500
= ₹48,500 crore
Conclusion:
The Gross Primary Deficit is ₹48,500 crore, indicating the fiscal shortfall of the government after excluding interest payments on past debt.
Answer: (a) ₹48,500 crores
