Find fiscal and primary deficit
Revenue expenditure - 70000
Borrowing - 15000
Revenu Reciepts - 50000
Interest Payment- 25%
Solution:
Revenue Deficit = Revenue expenditue - Revenue receipts = Rs. 70,000 - Rs. 50,000 = Rs. 20,000
Revenue Deficit = Revenue expenditue - Revenue receipts = Rs. 70,000 - Rs. 50,000 = Rs. 20,000
Here, Interest payments = 25% of revenue deficit
Interest payments = 25/100 × 20000 = Rs. 5,000
(a) Fiscal Deficit = Borrowings = Rs. 15,000
(b) Primary Deficit = Fiscal deficit - Interest payments
= Rs. 15,000 - Rs. 5,000 = Rs. 10,000
= Rs. 15,000 - Rs. 5,000 = Rs. 10,000
(a) Fiscal deficit = Rs. 15,000
(b) Primary deficit = Rs. 10,000