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?
Answer & explanation
Answer: (a) ₹ 48,500 crores
Gross primary deficit = gross fiscal deficit − net interest liabilities = ₹50,000 crore − ₹1,500 crore = ₹48,500 crore. The ₹10,000 crore of non-debt capital receipts is already counted while working out the fiscal deficit, so it is not adjusted again.
- ✓ (a) 50,000 − 1,500 = ₹48,500 crore, using the primary deficit formula.
- ✗ (b) ₹51,500 crore adds the interest liabilities instead of subtracting them.
- ✗ (c) ₹58,500 crore wrongly brings in the ₹10,000 crore of non-debt receipts, which are already reflected in the fiscal deficit.
- ✗ (d) The correct figure, ₹48,500 crore, is option (a).
Remember · Primary deficit = fiscal deficit − net interest liabilities. Non-debt capital receipts are already netted out inside the fiscal deficit.
📘 Read it in NCERT: Class 12 Introductory Macroeconomics, Ch 5 (practise this chapter) · Class 12 Introductory Macroeconomics, Ch 5 (practise this chapter)
Sources
- NCERT Class 12 · Introductory Macroeconomics, Chapter 5 “It is simply the fiscal deficit minus the interest payments Gross primary deficit = Gross fiscal deficit – Net interest liabilities”
- NCERT Class 12 · Introductory Macroeconomics, Chapter 5 “Gross fiscal deficit = Total expenditure – (Revenue receipts + Non-debt creating capital receipts)”
Question and answer: UPSC's official GS Paper I (2025, Series A) — paper ↗ · answer key ↗. Explanation: Minimalist IAS, checked 30 Sept 2026 (how we verify). ·