Redeemable and irredeemable debt
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RD is the debt that the govt. promises to pay off at some predefined future date.The govt. regularly pay tax on this debt.The principle amount is paid back on the expiry of the due date.
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IrrI.debt is that the principle amount of which is never returned.The govt. does not make promise to pay it off at some future date.however the govt continues to pay interest on i.
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bonds or other debt at various interest rates for various lengths of time. This debt is classified as redeemable and irredeemable.Irredeemable debt is perpetual. In theory, the loan or bond is never repaid so thedebt buyer benefits solely from the interest payments he receives.
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