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    Question

    Which of the following deficits indicates the true current fiscal position of the Indian Economy?

    A Revenue Deficit Correct Answer Incorrect Answer
    B Capital Deficit Correct Answer Incorrect Answer
    C Current Account Deficit Correct Answer Incorrect Answer
    D Primary Deficit Correct Answer Incorrect Answer

    Solution

    The true current fiscal position of an economy is best indicated by the primary deficit. The primary deficit is the fiscal deficit of the current year minus interest payments on previous borrowings. It provides insight into the government's borrowing needs, excluding interest payments, and indicates whether the government is managing its current expenditures within its revenues, excluding debt interest payments.

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