Q. 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?

Explanation : 

Fiscal deficit (FD) is defined as total government expenditure minus total receipts other than borrowings (i.e. revenue receipts plus non-debt capital receipts). In this problem FD is given as ₹50,000 crores, which already takes into account the ₹10,000 crore of non-debt capital receipts.

Primary deficit (PD) is the fiscal deficit net of interest payments. Equivalently,

PD = FD – Interest Payments.

Given, FD = ₹50,000 crores

Interest liabilities = ₹1,500 crores

Therefore, Gross Primary Deficit = FD – Interest

= 50,000 – 1,500

= ₹48,500 crores.

Hence the correct choice is (a) ₹48,500 crores.