Question

The main objective of measuring the primary deficit is to highlight present ___________.
(Choose the correct option to fill in the blank)

• A. fiscal imbalances
• B. fiscal balances
• C. recovery of loans
• D. cash grant-in-aid

Hint:

Primary deficit = Fiscal deficit – Interest payments. It signals the government’s present fiscal health without considering past debt.

Answer 1

The Correct Option is A

The primary deficit is calculated by subtracting interest payments from the fiscal deficit. It essentially indicates the extent of borrowing required to meet expenses other than interest payments. It highlights the present fiscal imbalances in the government’s finances, excluding the burden of past debt obligations.