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In a hypothetical economy, the total expenditure is Rs.700 crore, revenue receipts are Rs. 300 crore, non-debt capital receipts is Rs. 250 crore and net interest liability is Rs. 50 crore. The primary deficit for such an economy would be ___________.

Solution

✅ Correct Option: 2

Fiscal deficit == Total expenditure −- (Revenue receipts ++ Non-debt capital receipts) =700−(300+250)=Rs. 150= 700 - (300 + 250) = Rs.\ 150 crore.

Primary deficit == Fiscal deficit −- Net interest liability =150−50=Rs. 100= 150 - 50 = Rs.\ 100 crore.

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