INTRODUCTION

-managed by Reserve Bank of India

-borrowings of central & state govt.
-instrument of fiscal policy
-sum of internal &external debt.
-Internal sources like NSC’s,PPF.
--external sources like IMF,NRI deposits
--shortage in govt. Revenue is met through fiscal debt

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 THE FISCAL position of central & state govt. Had
remained comfortable in first three decades since
independence.
 It remained in deficit from 1979-1980.
 Both Centre & State Govt. started moderately with
debts levels from a GDP ratio at 47.9% ending
march 1981.
 It started to reach in its adverse conditions in end
of march 1992 showing a GDP ratio of 72.9%.
 It started showing signs of improvement in 1992-
98.
 Decreasing share of external debt:-
 Increased share of internal debt:-
 Less tied loan:-such loans are used only for the
purposes for which they are granted.
 Undeveloped money market:-money marekts are
less popular rather pension funds
 Funds for productive & unproductive purposes:-
(a)productive:- infrastructure ,public entt.
 (b)unproductive:- defence, social security schemes
 Since its origin public debt have seen lot of phases
from its deficit to improvement in mid 90’s.
 The ratio of external debt in public debt declined
continuously.
 In nutshell , every country seeks internal as well
as external debt to meet its growing financial
resources.
 Adequate sensitivity analysis of impact of
borrowings
 Accurate & up to date records of publicly
guaranteed loans
 Reduces cost & risk of financial instruments
present in the market