Which of the following deficits indicates the true current fiscal position of the Indian Economy?
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1 mark, −0.333Indian EconomyIndian public finance and the Union BudgetDeficit concepts in the Union BudgetEasyabout 1 min
IIT JAM 2022 Question 2: Indian public finance and the Union Budget
Answer and worked solution
Answer: (D)
The primary deficit equals the fiscal deficit minus interest payments on past debt.
By removing interest obligations inherited from earlier borrowing, it isolates the government's current-year fiscal stance, so it best reflects the true current fiscal position. The answer is (D).
The trap: (A) Revenue Deficit
Revenue deficit only compares revenue receipts and revenue expenditure; it ignores capital spending and the legacy interest burden, so it does not capture the current fiscal stance.
Indian public finance and the Union Budget has come up 80 times in 6 exams since 2011.
What this question tests
This question is on Deficit concepts in the Union Budget, part of Indian public finance and the Union Budget in Indian Economy.
The different measures of the Government of India's deficit and how to compute them.
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Question from the IIT JAM 2022 paper. Solutions are TestStop's own. Not affiliated with or endorsed by any examination authority.