Is India’s Public Debt Sustainable?

Krishanu Pradhan

South Asian Journal of Macroeconomics and Public Finance, 2014, vol. 3, issue 2, 241-266

Abstract: The article assesses the sustainability of public debt in India based on historical time series data on non-monetized liabilities/gross domestic product (GDP), revenue/GDP and expenditure/GDP of the combined central and state governments. The assessment based on unit root analysis of non-monetized liabilities/GDP, and co-integration analysis of expenditure/GDP and revenue/GDP shows the sustainability of public debt, mainly on account of accelerating GDP growth, lower cost of government borrowing, favourable currency composition and longer maturity profile of debt. JEL Classification: H62, H63, C22, C32, C51

Keywords: Fiscal policy; budgetary deficits; debt management; unit root; co-integration (search for similar items in EconPapers)
Date: 2014
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Persistent link: https://EconPapers.repec.org/RePEc:sae:smppub:v:3:y:2014:i:2:p:241-266

DOI: 10.1177/2277978714548637

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