Q.From the following data of a government budget, calculate the fiscal deficit and the primary deficit: Total expenditure = ₹12,00,000 crore; Total receipts excluding borrowings = ₹9,60,000 crore; Interest payments = ₹90,000 crore.

Fiscal deficit measures the government's total borrowing requirement, and primary deficit removes the part of that borrowing which is only needed to service past interest obligations. …

Step 1 — Fiscal deficit.

Fiscal Deficit = Total Expenditure − Total Receipts (excluding borrowings)

$= ₹12{,}00{,}000 \text{ crore} - ₹9{,}60{,}000 \text{ crore} = ₹2{,}40{,}000 \text{ crore}$

Step 2 — Primary deficit.

Primary Deficit = Fiscal Deficit − Interest Payments

$= ₹2{,}40{,}000 \text{ crore} - ₹90{,}000 \text{ crore} = ₹1{,}50{,}000 \text{ crore}$ …

A common error is subtracting interest payments from total expenditure before computing the fiscal deficit (this is not required — interest payments are removed only at the primary-deficit stage). Another error is treating borrowings as part of 'total receipts' when calculating the fiscal deficit — the whole poi …