he had also provided some solutions and
Indian economists have also been critically examined.

Lal S. N. (1978)6 in his study, “Problems of Public
Borrowings in Under Developed Countries” has studied the various facts of
public debt and in it mainly internal borrowings. In general, he has examined
the need for capital for economic development of the underdeveloped countries
and the role of public debt as a good option for capital formation. The view
from theories and concepts of different economists regarding the burden of
public debt are also discussed here. Increasing public debt with different
maturity, rate of yield, denomination etc., poses some intricate problems
before the public debt management. The author holds the view that, public debt
policy, which is subsidiary to the general economic policy, has to be
formulated in the background of a particular country, one policy may not hold
well in all settings. Author further suggested that, India is having different
background and problems than the developed countries and will have to evolve
her own debt policy.

Kiran Barman (1978)7 worked on
“Internal Debt and Policy since Independence” she has studied the
public debt of the India- both internal and external debt as well as public
debt is studied in this book. The author has made an elaborate study on modern
developments, the theory of public debt and on the fiscal and monetary impact
on public indebtedness on the economy. She has laid great stress on public debt
management and debt redemption analysis. While analyzing the problems of debt
management ownership pattern of public debt, maturity pattern, debt management
and interest rate policy, debt management and monetary policy is studied. While
analyzing debt redemption, methods of debt redemption, the problems of internal
debt redemption in India and the problem of external debt servicing in India
are analyzed.

Boskin M. J. (1982)8 published the article, “Federal
Government and Deficits : Some Myths and Realities.” He has tried to
measure the real value of government assets created thought debt receipts.
Boskin argues that when price rise takes place the normal value of public debt
fall and real value of debt finance government assets increases. Hence, in an
inflationary situation, the market value of assets created through debt finance
rises and hence the government has assets, which can be potentially utilized,
and then the potential income of the government can be calculated by taking its
potential wealth into account.

Mishra D. R. (1985)9 in the book, “Public Debt and
Economic Development in India” studied the growth and composition of the
internal as well as external debt of India in a detailed manner. As regards
external public debt, the growth and composition of the external public debt in
India before and after 1951 is studied. He has also studied the composition
profile of the external debt and the use of external public debt for
industrial, transport and infrastructure, power generation and agricultural
development in India. The burden of external debt and the problem of debt
servicing are studied in a separate chapter. Debt service- National Income
Ration, Debt Service and Gross External Aid Flows Ratio, Debt Service- Export
Earnings Ratio and Debt Service – Revenue Receipts Raito are used to measure
the financial burden of external debt servicing in India.

Seshan A (1987)10 wrote the article, “The Burden of
Domestic Public Debt in India.” The author states that the recent year
there is growth in the domestic public debt in India, particularly of the
central government. This has led to a concern that the country may be heading
for an ‘ internal debt trap’, i.e. a situation in which borrowing have to be
resorted to more and more just to keep up with the servicing of debt. A
situation is fast approaching even without raising the interest rates on
government securities and treasury bills when the centre would have to borrow
money just to pay for amortization of debt and interest on domestic borrowings.
Unless the government controls its level of borrowings, it would enter into the
debt-trap situation. He defines the internal debt trap as a situation when the
capacity of the market to respond to the governments borrowers being limited,
the amount borrowed might be just sufficient to meet with the debt-servicing
burden. After that, threshold, the country would enter into an internal debt
trap i.e. the borrowings would not be sufficient enough to meet even the debt
servicing charges.

Jha Raghabendra and Saggar Mridul K.11
(2001) published the
article, “Determinants of Sovereign Borrowings.” The present paper
begins with a discussion that makes a critical review of international Monetary
Fund’s role in international economy, particularly in helping those countries
that are going through Balance of payment crisis. The paper reveals that,
reliance on International Monetary Fund loans is still important for developing
countries, but its role has decreased for the OECD countries. Secondly, the
response of International Monetary Fund loans to macro economic variables of
different countries varies considerably. Hence, the authors argue that there is
some degree of arbitrariness in the International Monetary Fund’s loan program.

Lekha. S. Chakraborthy12
(2002) in his study,
“Fiscal Deficit and Rate of Interest” examines whether under the New
Economic Policy shift in the financing pattern of the fiscal deficit, more by
internal borrowings has created an upward pressure on the rate of interest in
India. The study found that, it was not fiscal deficit but the rising interest
payment of the debt which increase revenue deficits and hence the growth in
fiscal deficits. This result is in confirmation of the recent trend in Indian
public finance where the share of non-interest expenditure in total expenditure
is on the decline. This is due to sharp increase in interest paying obligations
arising due to rising cost of servicing the internal debt.

Mythili Bhusnurmath13
(2002) wrote the article, “The Untold Story” in which the author