| 1. India started using this term since 1997-98 |
| 2. Primary deficit is fiscal deficit minus interest payments |
| 3. It shows the current state of government finances |
A) 1 only
B) 1 and 2
C) 3 only
D) 1, 2 and 3
Correct Answer: D
Solution :
Primary deficit is fiscal deficit minus interest payments. India started using this term since 1997- 98. Primary deficit is considered a very useful tool in helping bring more transparency in the government?s pattern of expenditure. It shows the current state of government finances. If interest payments are deducted from fiscal deficit, then it will obviously show a lesser deficit for that year as the interest payments are on account of loans taken in the past and not in the present year
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