Primary deficit is the gross deficit which is obtained by subtracting interest payments from budget deficit of any country of a particular year. We need to know the value of primary deficit, while calculating the fiscal deficit.

Alternative Definition of Primary Deficit

Primary deficit corresponds to the net borrowing, which is required to meet the expenditure excluding the interest payment.

Primary Deficit = (Fiscal Deficit - Interest Payment)

Statistical reports: Primary deficit ( in India)

In the fiscal year 1999-2000: primary deficit was (-) Rs.2598.72 crore

In the fiscal year 2000-2001: primary deficit was (-) Rs.1038.38 crore

In the fiscal year 2001-2002: primary deficit was (-) Rs.2598.72 crore

Over the last few year the fiscal status of India has improved. In the fiscal year 2006-07, the revenue deficit in India was 2%, primary deficit was 0.1% and fiscal deficit was 3.7 percent. The government of India budget for 2007-08 predicts a revenue deficit of 1.5%, primary deficit of -0.2% and fiscal deficit of 3.3 percent.

nominal deficit is the deficit determined by looking at the difference between expenditures and receipts.

real deficit: nominal deficit - (inflation x total debt)