Explain the distinction between Fiscal Deficit and Primary Deficit.
Explain the distinction between Fiscal Deficit and Primary Deficit.
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| S. No. | Fiscal Deficit | Primary Deficit |
| 1. | It is an excess of all anticipated government expenditure over the anticipated government receipts in the year. | It is the difference between fiscal deficit and interest payments. |
| 2. | It increases the liability of the government in the form of repayment of loans with interest. | It indicates the borrowing requirements of the government to meet fiscal deficit excluding interest payments. |
| 3. | Fiscal Deficit= Total expenditure - Revenue receipts - Capital receipts excluding borrowing. | (a) Gross Primary Deficit = Fiscal Deficit - Interest payment.
(b) Net Primary Deficit = Gross Primary Deficit - Interest receipt. |
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