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      Question

      In the Union Budget 2026-27, the government transitioned

      toward a new fiscal consolidated path. If the nominal GDP growth is projected at 10.5% and the Fiscal Deficit is targeted at 4.3%, what is the implied "Primary Deficit" if interest payments account for 3.1% of GDP?
      A 1.2% Correct Answer Incorrect Answer
      B 7.4% Correct Answer Incorrect Answer
      C 1.4% Correct Answer Incorrect Answer
      D 0.8% Correct Answer Incorrect Answer

      Solution

      The Primary Deficit is calculated as:Β  Fiscal Deficit - Interest Payments.Β  Given a Fiscal Deficit of 4.3% and Interest Payments of 3.1%,Β  the Primary Deficit = 4.3% - 3.1% = 1.2%.Β  This metric is critical as it shows the government's fiscal stance excluding the burden of past debt.

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