Public Debt and Effect of Indian Economy

The public debt is one of the important crisis in India as well as World. The Central and State Governments are faced lot of financial crisis in recent decades. The level of public debt is increased in international, national and state level in different countries after the financial crisis in 2008. There is functional relationship between public debt and economic development in positive and negative relation are indicated by economist and policy makers. Whenever increasing more public debt is retard investment and economic growth. Huge size of public debt is impact on increase inflation, deficit of government budget and balance of payment problems, interest rate and budget deficit. It leads to socio-economic and political conditions are changes taking place. The repayment of interest rate to public debt is biggest problem in India. The Union Government has been spent one-third of total revenue as interest payment to external and internal sources.