Question

Payment of interest by government is Rs. 30,000 crore, which is `60%` of primary deficit. Find amount of borrowing.

Answer 1

Primary deficit `= ("Interest payment")/(60)`
`= (30,000)/(60%) = (30,000)/(60) xx 100 = 50,000`
Primary deficit = Fiscal deficit - Interest payment
Fiscal deficit = Primary deficit + Interest payment
= 50,000 + 30,000
= 80,000
Borrowing = 80,000 Crore