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प्रश्न
Does public debt impose a burden? Explain.
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उत्तर
Government debt or public debt refers to the amount or money that a central government owes. This amount may be borrowings of the government from banks, public financial institutions and from other external and internal sources. Public debt definitely imposes a burden on the economy as a whole, which is described through the following points.
1. Adverse effect on productivity and investment :-
A government may impose taxes or get money printed to repay the debt. This however reduces the peoples’ ability to work, save and invest, thus hampering the development of a country.
2. Burden on younger generations :-
The government transfers the burden of reduced consumption on future generations. Higher government borrowings in the present leads to higher taxes levied in future in order to repay the past obligations. The government imposes taxes on the younger generations, lowering their consumption, savings and investments. Hence, higher public debt has negative effect on the welfare of the younger generations.
3. Lowers the private investment :-
The government attracts more investment by raising rates of interests on bonds and securities. As a result, a major part of savings of citizens goes in the hands of the government, thus crowding out private investments.
4. Leads to the drain of National wealth :-
The wealth of the country is drained out at the time of repaying loans taken from foreign countries and institutions.
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संबंधित प्रश्न
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Suggest anyone measure to control the rising Revenue Deficit of the government.
Fiscal deficit = ______.
The primary deficit in a government budget is ______.
Read the following statements carefully and choose the correct alternatives given below:
Statement 1: Fiscal Deficit = Total Budget Expenditure - Total Budget Receipts (Net of borrowing)
Statement 2: Primary Deficit = Fiscal Deficit + Interest Payments.
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| Column A | Column B | ||
| 1 | Fiscal Deficit | (a) | Other than interest payments |
| 2 | Primary Deficit | (b) | Borrowings less interest payments |
| 3 | Revenue Deficit | (c) | Borrowings |
| 4 | Tax Deficit | (d) | Borrowings in government budget |
Fiscal Deficit equals:
Fiscal deficit equals:
The shape of average revenue curve in monopoly is ______
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| Figure 1: Trends in Fiscal deficit and Primary deficit |
Figure 2: Fiscal deficit as a percent of Budget estimate |
 |
 |
On the basis of the given information, calculate the value of:
- Fiscal deficit
- Primary deficit
| S.No. | Items | 2021-22 (₹ in crore) |
| (i) | Revenue Receipts | 20 |
| (ii) | Capital Expenditure | 15 |
| (iii) | Revenue Deficit | 10 |
| (iv) | Non-debt creating capital receipts | 50% of revenue receipts |
| (v) | Interest Payments | 4 |
A large amount of fiscal deficit proves to be counter productive. Give any two reasons in support of this statement.
