PUBLIC DEBT AND ECONOMIC GROWTH IN INDIA

PUBLIC DEBT AND ECONOMIC GROWTH IN INDIA

With the intention of stabilizing economy and to stimulate economic growth rate the modern day governments are presenting un balanced government budgets. This is increasing the growth of public debt. This deficit can be bridged by increasing the existing rates in taxes, imposing new taxes, and borrowing from public. The objectives of this study are 1) Analyzing the trends of public debt in India. 2) Analyzing the components of internal debt of India. 3) To find the threshold point of public debt to gross domestic product (GDP) ratio in India. 4) To investigate the connection among public debt and economic growth rate in India. Time period is 1981-2011-2012 and study used statistical tools and econometric techniques like percentage, R square, Adjusted R square, linear regression, and unit root test. Results show that there is an increasing trends in public debt of India. Regression result showed that 60 percent is the threshold point of public debt to GDP ratio and unit root test cleared that no need to check connection among public debt and gross domestic product.

R Naveen

DEPARTMENT OF ECONOMICS