The Growth of Indian Public Debt: Dimensions of the Problem and Corrective Measures

Raja Chelliah

No 1991/072, IMF Working Papers from International Monetary Fund

Abstract: This paper traces the causes of the rapid growth of India’s public debt, with special reference to internal debt. It then demonstrates that the growth of debt would become unsustainable by the end of the 1990s if the present trends continue. It develops a methodology to iterate the path of growth of debt to discover the sustainable level of the primary deficit. Finally, it suggests concrete measures to bring down the primary deficit.

Keywords: WP; rate of interest; capital formation; interest payment; GDP ratio; private sector; treasury bills debt Rb; deadweight debt; RBI credit; Interest payments; Public enterprises; Domestic debt (search for similar items in EconPapers)
Pages: 51
Date: 1991-07-01
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