Option 1 -> Primary Deficit = Fiscal Deficit - Interest Payments. If Fiscal Deficit = Interest Payments, then Primary Deficit = 0.
Option 2 -> If Fiscal Deficit > Interest Payments, Primary Deficit would be positive, not zero.
Option 3 -> Revenue deficit relation to interest payments doesn't determine Primary Deficit, which is based on Fiscal Deficit.
Option 4 -> If Fiscal Deficit < Interest Payments, Primary Deficit would be negative, not zero.
Hence, Option 1: Fiscal Deficit = Interest Payments -> Primary Deficit is calculated as Fiscal Deficit minus Interest Payments. When these two values are equal, their difference becomes zero. This means the government's borrowing requirement (fiscal deficit) is entirely due to interest obligations on past debt, with no additional borrowing needed for current expenditure exceeding revenue -> correct