Public debt, also known as government debt or national debt, refers to the total amount of money owed by a country’s government to its citizens, businesses, and foreign investors. It is a cumulative result of budget deficits, borrowing for various purposes, and interest payments.

High public debt is a matter of concern for several reasons:

1. Burden on future generations: High debt may lead to increased taxation and reduced government spending on essential services, affecting future generations.

2. Inflation: Excessive borrowing can lead to inflation, reducing the purchasing power of citizens.

3. Reduced credit rating: High debt may lower a country’s credit rating, increasing borrowing costs and reducing investor confidence.

4. Reduced fiscal space: High debt limits a government’s ability to respond to economic downturns or fund development projects.

In the context of India, high public debt is a concern due to:

– Rising debt to GDP ratio (currently over 90%)

– Large fiscal deficits

– Increasing reliance on market borrowing

– Pressure on interest payments (around 50% of tax revenue)

– Limited fiscal space for development spending

To address these concerns, India needs to focus on fiscal consolidation, improve tax compliance, and enhance economic growth through structural reforms.