##
**
What is Primary Deficit?
**

It is difference between

Fiscal Deficit of Current year

and

Net Interest Payments

####
**
FORMULA
**

PRIMARY DEFICIT

= FISCAL DEFICIT - NET INTEREST LIABILITY

=FISCAL DEFICIT - (INT PAYMENT ON LOAN TAKEN - INT RECEIVED ON LOAN GIVEN)

### NCERT Questions

**
No questions in this part
**

### Other Books

#### Question 1

**
In the following questions, select the correct answers:
**

**
Primary defect in a government budget is:
**

- Revenue expenditure - Revenue receipts
- Total expenditure - Total receipts
- Revenue defect - Interest Payments
- Fiscal deficit - Interest Payments

D. Fiscal deficit - Interest Payments

#### Question 2

**
Which of the following statements is true?
**

- Fiscal deficit is the difference between total expenditure and total receipts
- Primary Deficit is the difference between total receipt and interest payments
- Fiscal Deficit is the sum of Primary Deficit and Interest Payments

C Fiscal Deficit is the sum of Primary Deficit and Interest Payments

**
Explanation
**

Primary Deficit = Fiscal deficit - Interest Payments

Primary Deficit + Interest Payments = Fiscal deficit

#### Question 3

**
Primary deficit in a government budget is zero, when _____.
**

- Revenue Deficit is zero
- Net Interest Payments are zero
- Fiscal defict is zero
- Fiscal defict is equal to interest payment

D. Fiscal defict is equal to interest payment

**
Explanation
**

Primary Deficit = Fiscal deficit - Interest Payments

When

Fiscal Deficit = Interest Payments

Primary Deficit = Fiscal deficit - Fiscal Deficit

Primary Deficit = 0

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