Public Debt in India

5785 WordsNov 6, 201024 Pages
ABSTRACT This report deals with the basic understanding of Public debt, what it comprises of and how it is managed and why does the government resort to public borrowing. Various forms of public debt have been discussed to facilitate better understanding of the concept. We have also attempted to analyze the impact of certain macro economic variables on the public debt in our country. For this purpose, we have used the “SPSS 13.0 for windows” as a tool to carry out the regression analysis. index A ABSTRACT 3 ACKNOWLEDGEMENT 2 ANALYSIS 19 B BACKGROUND 5 M METHODOLOGY 18 O OBJECTIVES 5 R REFERENCES 23 S SUMMARY 22 Public debt in india 1. OBJECTIVES 1.1 To identify what is public debt and why governments opt for public debt 1.2 To…show more content…
Public debt is also calculated as the percentage of GDP. Public debt is influence by GDP as with the increases of GDP, confidence in lenders increases and as a result borrowing becomes easy. Tax Estimate/ GDP (factor cost)- To reduce the number of independent variable and to increase the degree of freedom we have develop a new independent variable by submerging Tax Estimate and GDP (at factor cost). This is done by dividing Tax Estimate by GDP (at factor cost). 3.1. Public Debt – Concept And Causes Modern fiscal policy endorses unbalanced government budgets for purposes of stimulating economic growth and stabilizing economy, its application leading to a growing public debt. Growth of public debt has been quiet substantial in almost all developing countries in recent years. Public debt in simple words means debt incurred by the government In mobilising savings of the people in the form of loans, which are to be repaid at a future date with interest. Public debt can be both internal as well as external. According to Richard and Peggy Musgrave, “ (public) borrowing involves a withdrawal made in return for the government’s promise to repay at a future date and to pay interest at the interim.” The concept of public borrowing as such was condemned by classical economists such as Hume and Adam Smith who considered that it would compel the government To tax the public and
Open Document