What does a zero primary deficit indicates?
Download our app for free and get started
Primary deficit refers to the difference between fiscal deficit and interest payments. Hence, a zero primary deficit means fiscal deficit is equal to interest payments. Also we know that fiscal deficit is equal to borrowings payment, hence a zero primary deficit indicates that government is paying its interest commitments by the way of borrowings, which is not a good sign as borrowings further increases future liabilities.
Download our appand get started for free
Experience the future of education. Simply download our apps or reach out to us for more information. Let's shape the future of learning together!No signup needed.*
Similar Questions
- 1View SolutionGiving reasons, state whether the following statements are true or false:
- Value added tax is a direct tax.
- Subsidies are treated as revenue expenditure.
- Borrowings from public are treated as revenue receipts.
- Revenue deficit is a part of fiscal deficit.
- 2View SolutionDefine multiplier. What is the relation between marginal propensity to consume and multiplier? Calculate the marginal propensity to consume if the value of multiplier is 4.
- 3View Solution‘The fiscal deficit gives the borrowing requirement of the government’. Elucidate.
- 4View SolutionA person claims that he should be exempted from tax payment as he does not use any government services in general. Should the person be allowed to do so?
- 5View SolutionGiving reasons, classify the following into direct tax and indirect tax.
- Wealth tax.
- Entertainment tax.
- Income tax.
- 6View SolutionWhat is disinvestment? Does it refer to revenue receipts or capital receipts of the government? Give an example.
- 7View SolutionWhat is government budget? Give the meaning of:
- Revenue deficit.
- Fiscal deficit.
- 8View SolutionCalculate budgetary deficit from the following data:
S. No. Items ₹(in crore) (i) Total expenditure 1,00,000 (ii) Total receipts 88,000 - 9View SolutionExplain the relationship between revenue deficit and fiscal deficit. Can there be fiscal deficit without a revenue deficit?
- 10View SolutionIs balanced budget good for India?