Topic Details (Notes format)

Public Finance and Government Debt

Subject: Economics

Book: Comprehensive Indian Economy

Public finance studies government revenue, expenditure, and debt management. The center and states raise funds via taxes, market borrowings, and external loans. Debt sustainability rests on prudent fiscal consolidation—if deficits are high over time, interest payments can crowd out development expenditure. Key metrics include debt-to-GDP ratio and interest coverage. The FRBM Act imposes rules to keep deficits within targets. In exam contexts, be ready to assess how large debt affects inflation, currency stability, and growth. Also highlight the role of zero-based budgeting or outcome budgeting to ensure efficient resource allocation.

Practice Questions

What does the Gini Coefficient measure?

View Question

Which of the following is a feature of monopolistic competition?

View Question

What does the term “elasticity of demand” measure?

View Question

Which of the following best describes “capital formation”?

View Question

What is the objective of the Goods and Services Tax (GST)?

View Question

Which of the following is NOT an example of an indirect tax?

View Question

Which of the following statements best defines Gross Domestic Product (GDP)?

View Question

What is the primary purpose of Special Economic Zones (SEZs)?

View Question

Which organization publishes the Human Development Index (HDI)?

View Question

What is meant by “credit rating”?

View Question