Primary deficit: Silver lining in govt's efforts to contain fiscal deficit

The parameter, which excludes interest payments on govt borrowings, has declined to 0.2% of GDP in the revised estimate, from 0.3% in budget estimate; govt aims to eliminate it in 2020-21 and 2021-22

The union government is projected to slip on the fiscal deficit target for two years in a row – 2018-19 and 2019-20 – according to the interim Budget presented by finance minister Piyush Goyal. 

However, it has improved on another key parameter of fiscal consolidation. And that is primary deficit, which is basically the excess of government expenditure (not including interest payments), over its receipts.  Essentially, this is fiscal deficit, excluding interest paid on government borrowings.

According to interim Budget documents, the Centre's primary deficit is now projected to decline to 0.2 per cent of GDP in the revised estimate