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If interest payments are deducted from fiscal deficit, the remainder is known as:
Question

If interest payments are deducted from fiscal deficit, the remainder is known as:

A.

Primary deficit

B.

Budgetary deficit

C.

Revenue deficit

D.

Monetized deficit

Correct option is A

The primary deficit is calculated by subtracting interest payments from the total fiscal deficit. It represents the borrowing requirements of the government for purposes other than paying off interest on previous debts. According to the Ministry of Finance, focusing on the primary deficit helps understand the government's real borrowing needs, excluding obligations related to past debts. This is a key metric for policymakers to assess fiscal sustainability and determine whether borrowing is being used for productive or consumptive purposes.

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