Public debt: issues, challenges and trends in india

The present paper discusses the issues challenges and trends of public debt in India since 1980. It first explains the reason for public debt and then gives a brief overview on the concept of Public Debt. The paper analyses the theoretical perspective of the public debt in which the views of various authors on public debt have been explained. Further the paper looks at the trends of public debt and gross interest obligation of the government since 1981. It discusses how the government debt have been used and specifically focuses on decline in the recovery ratio over the years. Due to decline in recovery ratio there is either increase in fiscal deficit or decline in non interest expenditure of the government or a combination of both. Also the increased amount of public debt is not leading to increase in productive capacity of the government indicating the inefficient utilization of the funds borrowed either from internal of external source. Lastly the paper points out the areas where the government is lacking and the measures the government should take so that the funds can be used in an efficient manner.