A Business Encyclopedia

Primary Deficit

Definition: The Primary Deficit is the difference between the fiscal deficit of current year and the interest paid on the previous borrowings. Thus, primary deficits are government’s borrowings exclusive of interest payment.

Generally, the loan raised by the government is inclusive of the interest amount, and if that amount is deducted from the principal loan amount, the balance amount is called as the primary deficit. The purpose of measuring such deficit is to know the amount of borrowings that government can utilize in the expenses other than the interest payments.

Symbolically, it can be represented as:

Primary Deficit = Fiscal Deficit – Interest payments on the previous borrowings

In case, the primary deficit is zero; then the fiscal deficit becomes equal to the interest payment, which means government resort to borrowings just to pay off the interest payments. Thus, the low or zero primary deficits indicate that the government was forced to resort to the external borrowings to meet out its previous interest obligations, and nothing gets added to the existing loan.

Leave a Reply

Your email address will not be published. Required fields are marked *


Related pages

adjourning stage of group developmentformula operating profit marginmeaning of inflationaryinelastic economic definitionvestibule training wikipediadistribution channel conflict managementdefination of businesshow to do manpower planningconsumer behavior and utility maximizationfeatures of monopolistic marketnational pension yojanatqm meaning definitionentrepreneurial process definitionseed capital assistance meaningbusiness turnaround managementmeaning of repo and reverse repowhat is meant by linearitywhat are some types and sources of channel conflictdefinition for geocentricsocial loafing definitionfunctions of cash budgetdefine seasonal unemploymentsubsistence wagebureaucratic organization max webertechniques of business forecastingquota sample examplemeaning of lenient in tagalogdefine achievers4ps of marketing definitionseducation loan moratoriummeaning ethnocentrismfranchise economics definitionefficiency hindi meaningwhat is whistltotal assets turnover ratio definitionjargons definition and exampleshindi meaning of reasonableprofitability ratios meaningmonetarist inflationmeaning of liability in hindiinternationalization strategynominal group processvictor vroom expectancy theoryarbitrage opportunity definitioncost push inflation occurs whenoutflank definitionitemized rating scaleelastic demand meaningwhat is ansoffdefine job enrichmentforming stage of group developmentbusiness process reengineering definitionmodels of leadership pptforward market hedge definitiontaylor and scientific managementdepreciation to fixed assets ratiofactors influencing buying decisionoperating profit margin ratiolaissez faire decision makingmarginal costingsustitution methodmarketing macro environment factorsdef of motivationreinforcements definitiondebtor collection period formularetail jargonshow to calculate roce ratioclassical conditioning of ivan pavlovdeontological theories definitiondefinition liquidatederg motivation theorypayed definitionwhat is oligopoly market structuresenior citizen savings schemeimportance of bin cardgnp marketing