This document is highly rated by … In general, there are, in fact, two ways of crediting a portion of revenue to this fund. Your IP: 45.77.248.8 It is assumed that since most taxpayers are poor people while lenders are rich people, such conversion of public debt results in a less unequal distribution of income. Cloudflare Ray ID: 5eab6a605d610176 When the government uses this method of refunding, there is no liquidation of the money burden of public debt. Firstly, it enables a government to repay its (emergency) debt by collecting additional tax revenues from the rich people (i.e., people who have huge properties). They have been raised from institutional creditors at concessional rates. Redemption of debt refers to the repayment of a public loan. iii. However, of late, there is a demand for creating a specialized agency for managing public debt as exists in some advanced economies. Here, instead of concentrating on the repudiation of debt, we discuss below other important methods for the retirement or redemption of public debt: Refunding of debt implies issue of new bonds and securities for raising new loans in order to pay off the matured loans (i.e., old debts). Under this method, the government pays off its debt on the basis of terminal annuity. However, the Union government clearly distinguishes its debt liabilities from those of the states. Although convenient, it is one of the slowest methods of redemption of debt. External debt … b. But during emergencies (e.g., war, natural calamities, etc.,) government may force the nationals to lend it. vi.
Public debt is incurred when the government floats loans and borrows either internally or externally from banks, individuals or countries or international loan-giving institutions. The document Types of Public Debt - Public Finance B Com Notes | EduRev is a part of the. Financial Express is now on Telegram. just for education and the Types of Public Debt - Public Finance B Com Notes | EduRev images and diagram are even better than Byjus! By debt conversion we mean reduction of interest burden by converting old but high interest-bearing loans into new but low interest-bearing loans. Compulsory Reduction in the Rate of Interest: The government may pass an ordinance to reduce the rate of interest payable on its debt. EduRev is a knowledge-sharing community that depends on everyone being able to pitch in when they know something. Click here to join our channel and stay updated with the latest Biz news and updates. That is why unproductive debts are called dead­weight debts. your solution of Types of Public Debt - Public Finance B Com Notes | EduRev search giving you solved answers for the same. Maturity period of Treasury bill is usually 90 days. Public debt is the total liabilities of the central government contracted against the Consolidated Fund of India.

It is the fund into which certain portion of revenue is put every year in such a way that it would be sufficient to pay off the debt from the fund at the time of maturity. In the case of irredeemable debt, government does not make any promise about the payment of the principal amount, although interest is paid regularly to the lenders. Types of Public debt Productive and Unproductive debt Voluntary and Compulsory debt Internal and External debt Short term , Medium Term, and Long term debt Redeemable and Irredeemable Debt Funded and Unfunded debt Department of Economics and Foundation Course, R.A.P.C.C.E. Italy: Government approves stimulatory budget to sustain recovery following coronavirus blow. Performance & security by Cloudflare, Please complete the security check to access. On the other hand, if a public loan is floated in the foreign capital markets, i.e., outside the country, by the government from foreign nationals, foreign governments, international financial institutions, it is called external debt.

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