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The gross primary deficit is the fiscal deficit excluding interest payments. It indicates the government’s borrowing requirements apart from paying interest on past borrowings. Key Points: 1. Gross fiscal deficit = Total expenditure – Total revenue (excluding borrowings). 2. Net interest liabilities represent interest payments on debt. 3. Primary deficit reflects the core fiscal stance without debt obligations. 4. It is a key metric for evaluating fiscal sustainability. 5. A higher primary deficit implies higher borrowing needs. Bee Facts: • (a): Not a valid calculation formula. • (b): RBI borrowing is not included in this formula. • (c): Incorrect as net interest liabilities are not added. • (d): Correct formula for gross primary deficit.
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