Discuss Public Debt: Classification, effect, burden, repayment.
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Public debt: When government expenditure exceeds its revenue one option is it has to go for public debt. A government can borrow funds from sources within the country or aboard.
Explanation: On the basis of sources they are classified in to Internal debt and public debt
Repayment of public debt by government is also known as redemption of public debt . Internal debt can be paid in domestic currency but to repay external debt foreign exchange is required.
The following are the methods of redemption of public debt:
1.Surplus budget
2.Refunding
3.Annuities
4.Sinking fund
5.Conversion
6.Capital levy
8.Surplus Balance of payments
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