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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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Explain 'Revenue Deficit in a Government budget? What does it indicate?
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Are fiscal deficits inflationary?
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Government should try to control the rising fiscal deficit.
Regressive tax is that which is ______.
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Assertion (A): Fiscal deficit is measured in terms of borrowings.
Reason (R): External borrowings increases the Fiscal deficit.
A fiscal deficit is equal to borrowings. It is ______
______ in the budget is an important measure of deficit.
Which of the following statements are correct
Statement 1: Fiscal deficits are not necessarily inflationary; though, they are generally regarded as inflationary.
Statement 2: When the government expenditure increases and tax reduces, there is a government deficit and there will be a corresponding increase in the aggregate demand.
How do we get the primary deficit from the fiscal deficit?
Which of the following statements is true?
Primary deficit is borrowing requirements of government for making:
Fiscal deficit equals:
The shape of average revenue curve in monopoly is ______
Compare the trends depicted in the figures given below:
| 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 |
