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BY: PRIYANKA SHARMA PRIYANKA DEB SHARMA TANUSHREE AGARWAL KHUSBOO NAHAR RIA KUNDU
TYPES OF DEBT
TYPES OF DEBT
Public Debt Internal Debt External Debt Private Debt
PUBLIC DEBT
Public debt or public borrowing is considered to be an important source of income to the government. If revenue collected through taxes & other sources is not adequate to cover government expenditure government may resort to borrowing. Such borrowings become necessary more in times of financial crises & emergencies like war, droughts, etc.
PRIVATE DEBT
INTERNAL DEBT
Internal debt is the part of the total debt in a country that is owed to lenders within the country. Internal debt owed by a government is part of the country's national debt.
These may be traded but will only rarely be spent on goods and services.
The Indian government's internal debt rose during the second quarter of 2011-12 and the it had to pay higher interest to raise funds. The internal debt to GDP ratio increased to 32.3% of GDP during Q2 of 2011-12 from 31.4% in the previous quarter,
EXTERNAL DEBT
External loans are raised from foreign countries or international institutions. These loans are repayable in foreign currencies. External loans help to take up various developmental programmes in developing and underdeveloped countries. These loans are usually voluntary. An external loan involves, initially a transfer of resources from foreign countries to the domestic country but when interest and principal amount are being repaid a transfer of resources takes place in the reverse direction.
The sovereign debt crisis in US is going to affect the export of goods from India and flow of capital into the country.
Foreign Exchange Reserves - India holds roughly US$41 billion worth in U.S. treasuries Any cuts in the US governments healthcare spending will affect the pharmaceutical industry Increase in tax will effect garment industry