Public Debt:
It is an instrument of resource mobilization by the modern government. It simply denotes the "Borrowing of Government from People, RBI, Financial Institutions and so on". The following are the classification of Public Debt.,
1. Internal Debt:
When government borrows within the country, it is called internal debt such as borrowings from individuals, business establishments, financial institutions, commercial banks and central bank. Internal debt also includes Loans raised by the government in the open market through treasury bills and special securities issued to the RBI, Rupee securities(non-interest bearing) issued to international such as the IMF and the world Bank and most importantly various bonds like the oil bonds and fertilizer bonds ect.,
2. External Debt:
When government borrows the money from out side the country it is known as External Debt such as borrowings from Foreigners, foreign Banks, Foreign governments and international institutions. Unless the internal debt, the External debt has material loss to the debt country. The following are the some of examples.,
* Long term external debt which is the bulk part
* NRI deposit and multilateral loans
* Commercial borrowings
* Bilateral loans and
* Negligible amount from Export Credit
3. Voluntary and Compulsory:
When the Government borrows by issuing securities to which people are free to subscribe, it is called voluntary debt. When the government on the other hand, enforces borrowing through legal contexts or compulsions , then it is Compulsory debt.
4. Productive and Unproductive:
Productive debt is one which is incurred for those projects which yields income to the government. For example the debt incurred to meet expenditure on power projects, irrigation, public enterprises an railways. Whereas Unproductive debt neither yields any income not creates any assets. Debts incurred for Budgetary deficit, war, natural calamities ect.,
5. Funded and Non-Funded:
Funded debt is a long term debt payable after a year, while unfunded debt is a short term debt, payable within one year.
6. Redeemable and Irredeemable:
When the government borrows the money with a promise to pay off in future at a specified date then it is Redeemable debt. Whereas the government has no such agreement to redeem the money in future then it is irredeemable debt.
It is an instrument of resource mobilization by the modern government. It simply denotes the "Borrowing of Government from People, RBI, Financial Institutions and so on". The following are the classification of Public Debt.,
1. Internal Debt:
When government borrows within the country, it is called internal debt such as borrowings from individuals, business establishments, financial institutions, commercial banks and central bank. Internal debt also includes Loans raised by the government in the open market through treasury bills and special securities issued to the RBI, Rupee securities(non-interest bearing) issued to international such as the IMF and the world Bank and most importantly various bonds like the oil bonds and fertilizer bonds ect.,
2. External Debt:
When government borrows the money from out side the country it is known as External Debt such as borrowings from Foreigners, foreign Banks, Foreign governments and international institutions. Unless the internal debt, the External debt has material loss to the debt country. The following are the some of examples.,
* Long term external debt which is the bulk part
* NRI deposit and multilateral loans
* Commercial borrowings
* Bilateral loans and
* Negligible amount from Export Credit
3. Voluntary and Compulsory:
When the Government borrows by issuing securities to which people are free to subscribe, it is called voluntary debt. When the government on the other hand, enforces borrowing through legal contexts or compulsions , then it is Compulsory debt.
4. Productive and Unproductive:
Productive debt is one which is incurred for those projects which yields income to the government. For example the debt incurred to meet expenditure on power projects, irrigation, public enterprises an railways. Whereas Unproductive debt neither yields any income not creates any assets. Debts incurred for Budgetary deficit, war, natural calamities ect.,
5. Funded and Non-Funded:
Funded debt is a long term debt payable after a year, while unfunded debt is a short term debt, payable within one year.
6. Redeemable and Irredeemable:
When the government borrows the money with a promise to pay off in future at a specified date then it is Redeemable debt. Whereas the government has no such agreement to redeem the money in future then it is irredeemable debt.
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