In India, primary deficit = fiscal deficit - interest payments accrued on loans
one view is it should be as HIGH as possible because that would mean we are borrowing not to pay interest payment but for investment, wealth creation.
another view is it should be low because that would mean that you are not borrowing anymore to meet your expenditure.
I tried to search on the Internet but it aggravated the confusion as one of the leading newspaper in India remarked in one of its articles -“The rise in primary deficit is not the sign of a healthy economy. It means the government is spending more on interest payments instead of creating wealth.” I just couldn't understand this statement.
Never been this confused in economics. Please guide.
