what r the implications of primary deficit?
as primary deficit is fiscal deficit minusinterest payment on previous borrowings. therefore it indicatesthe ammount of borrowings required to meet expenditure other than interest payments.further it implies that if primary deficit is zero,then fiscal deficit is equal to interest paymentwhich indicates that interest payment on previous loans have led to borrowings.
We know primary deficit=Fiscal deficit-interest payment
Primary deficit indicates how much of the government borrowing are going to meet expenses OTHER THAN interest payment. The difference between fiscal defit and primary eficit shows the amount of interest payment on borrowing made in the past. o, a low or zero primary deficit indicates that interest commitment on earlier loans has forced the government to borrow which is very dangerous for an economy.