Introduction

Public debt is all the money a government borrow to cater for its needs when its monetary supply is inadequate. The money can be national currency which is in circulation in a certain country or the money can be international currency which is provided by an international organization. The second of them is the high public debt which is considered to be one of the most pertinent issues threatening the stable and further economic development.

Just how much public debt is actually a problem? Total government spending is reduced by an increase of government spending. Many of them have been shut down due to decline in the government revenue thus the amount of money which is available to the population to be spent in priorities such as education, health and development.
– Increased private investment: That is; when the government borrows credit it leads to demand for credit and has an effect of raising the interests rates. This makes people avoid having more money because investors assume that having more money will lead to increased borrowing costs hence reducing on economic growth.
– Inflation risk: Government borrowing, and particularly from central banks, will increase the interest rates and inflation.

– Financial Stability:
H2, shows high debt –Gross Domestic product ratio meaning poor fiscal position of the government resulting to the government’s inability to repay the used debt. These take their toll on investor confidence and subsequently raise borrowing costs.

Social welfare:
There is less spending on social assistance as government debt service has cut high spending on the needed communities.
Many generations inherit various kinds of debt, which hampers their opportunities to make money in order to build a better life and to meet basic needs.

Specificities of India

Public debt of Indian government is still a rising parameter. Using IMF statistics, as a result, the ratio of debt to the GDP may possibly amplify up to 84% in FY of 2022-23. The government had intended to finance a fiscal deficit of 5.9 per cent of GDP by FY24 and will raise more than that intended FRBM with 3% of GDP in FY 24. For FY23, the interest of public debt of the revenue has been planned as 41% as per the budget of 2023-2024. One of the factors that might have contributed to increase debts service burden is this burden of rising debts.

There is high public debt and for the government to accomplish this, it will necessitate the need to set and accomplish fiscal consolidation objectives that are set. These are:

– Tax revenue increase: Reform the tax structure, in the sense that, extend the tax net and at the same time enhance its effectiveness.
– Controlling non-revenue spending: Restrict spending of the government and coordinate civil services.
– Stimulating economic growth: Aid the country to produce money to pay the debts due and pay less than a hundred ratio of debt to gdp.

Conclusion

In such a situation, although the public debt is desirable for the economic development, the debt is the issue. For India again it is essential that there should be some sort of equilibrium achieved in the public finances because to sustain the debt burden and maintain healthy balance of public finances for long term growth is imperative without causing volatile shocks in the system.