The Government allocates more amount for subsidies in the budget.(a) G

1.	The Government allocates more amount for subsidies in the budget.(a) Give your opinion about its impact on fiscal deficit.(b) Total Expenditure = ₹3,000 croresRevenue receipts = ₹1,500 croresNon-debt creating Capital receipts = ₹600 croresCalculate Gross(c) Define Primary Deficit.
Answer» (a) Increases fiscal deficit. (b) Gross fiscal deficit, = 3000 – (1500 + 600) = 3000-2100 = 900 (c) Primary deficit is fiscal deficit minus the interest payments ie, Primary deficit = fiscal deficit – Interest payments

The Government allocates more amount for subsidies in the budget.(a) Give your opinion about its impact on fiscal deficit.(b) Total Expenditure = ₹3,000 croresRevenue receipts = ₹1,500 croresNon-debt creating Capital receipts = ₹600 croresCalculate Gross(c) Define Primary Deficit.

Answer»

(a) Increases fiscal deficit.

(b) Gross fiscal deficit, = 3000 – (1500 + 600)

= 3000-2100 = 900

ie, Primary deficit = fiscal deficit – Interest payments