Public debt meaning in India
Public debt meaning in India is include internal debt comprising borrowing inside the country like market loans, For example from the RBI on the basis of T-Bills. And External debt comprising loans from foreign countries , International financial Institutions , NRI deposits etc. In the expression public debt & other liabilities, the other liability include outstanding against various small saving schemes provident fund etc. It also includes private sector borrowing.
Public sector justify as government doesn’t Have adequate resources & the taxation can not be done beyond the point . It should be for productive reasons & also for well fare reasons. The spiral of deficits & debt run the risk of undermining countries the creditworthiness, de-evaluating currency & destabilising the entire economy with grave social consequences. Therefore It should be incur judiciously.
The combined government deficits both central & state government at 80% of GDP was there in 2010-11 which was brought down to 68% by 2014-15 on the basis of recommendation of 13th finance commission. The outstanding internal debt & external debt along with other liabilities of government at the end of 2014-15 was amount to 56514844.22 crore from 1991 to 2012, the Indian government debt to GDP average 76.6%.
Generally public debt as a percentage of GDP is use by investors to measure a countries ability to make future payments on it’s debt. Thus affecting the countries borrowing cost & government bond yields. In simple words public debt meaning in India is that the total combination or borrowing by government from internal and external sources. Public debt meaning can also be describe as the sum of the internal and external debt of a country by government.
There are two parts of Public Debt which are explain below.
Internal debt includes loans raise by government in the open market operation. For example T-Bills, G-Sec special securities issued to RBI various bonds like oil bonds, fertiliser bonds etc. The money sterilise from the market by market stabilisation scheme also shown in government statement of liabilities. The market stabilisation scheme was establish in 2004. It envisages the issue of T-Bills ( treasury bills) or securities to absorb excess liquidity arising out of excessive foreign exchange inflows.
The internal debt of government also includes others like outstanding against small saving schemes provident funds deposits, under special deposits schemes , these debt are show under separate head title other liabilities.
The Public debt market should be moderate for the reason because it affect government overall policy, investment, and money economy.
External debt is owe to condition outside the country . The outside creditors can be governments, financial institutions corporate, Private household.
The External debt include money owe to Private commercial banks other governments or international financial institution like IMF world bank. There are several type of external debt these are:-
3- IMF ( International Monetary Fund) Loan
4- Trade credit
5- Commercial borrowing
6- NRI ( Non Residential indian) Deposits
7- Rupees Debt – It refers to that part of indian’s external debt that is denominated in the Indian rupee.
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