The gross primary deficit can be expressed as ______.

Correct option is A

• The Gross Primary Deficit (GPD) is the fiscal deficit of the government before deducting interest payments. It is calculated as the Gross Fiscal Deficit (GFD) minus Net Interest Liabilities.

• The formula is:

  • Gross Primary Deficit (GPD) = Gross Fiscal Deficit (GFD) - Net Interest Liabilities

  • The Gross Fiscal Deficit includes total borrowing requirements of the government, while Net Interest Liabilities refers to the interest payments on the previous loans.

• Fiscal Deficit: Represents the total borrowing requirements of the government, including interest payments.

• Primary Deficit: Refers to the fiscal deficit minus the interest payments, reflecting the government's current expenditure excluding past borrowings.

• Importance of GPD: The Gross Primary Deficit is important to measure the government's fiscal health excluding interest payments. A reduction in primary deficit is often a target for fiscal consolidation.

• Option B: Capital expenditure minus revenue deficit is not the correct expression for gross primary deficit.

• Option C: Gross fiscal deficit plus net interest liabilities overstates the deficit; it is not a correct formula.

• Option D: Revenue deficit plus capital expenditure does not define the gross primary deficit in fiscal terms.