What does a zero primary deficit indicates?

cbse-class-12

#1

What does a zero primary deficit indicates?


#2

Primary deficit refers to the difference between fiscal deficit and interest payments. Hence, a zero primary deficit means fiscal deficit is equal to irtterest payments.
Also we know that fiscal deficit is equal to borrowings payment, hence a zero primary deficit indicates that government is paying its interest commitments by the way of borrowings, which is not a good sign as borrowings further increases future liabilities.