Public Debt refers to the loan amount a country owes to lenders like businesses, individuals, and other governments. Public debt is the national debt of a country and can be both internal and external. Role of Public Debt 1. Levelling tax rates 2. Stabilization 3. Funding emergency expenditure 4. Increasing productivity 5. Remunerative capital formation 6. Filling the saving-investment gap Limitations of Public Debt - Service charges - Increasing inequality - Using it unproductively Types of Public Debt Productive and Unproductive Debts Productive Debts boosts the economy’s productive capacity Unproductive Debts are neither self-liquidating nor boost the economy’s productive capacity Voluntary and Compulsory Debts Voluntary Debts are announced as bonds and certificates by the government. Compulsory Debts are raised coercively especially during emergency times Internal and External Debt Internal Debt is raised within a country with help of institutions and citizens and is payable in domestic currencies External Debt is raised from foreign countries and is payable in foreign currencies Short, Medium and Long Term Debt Short-Term Debt matures within 3- 9 months, medium-debt between short and long-term and long-term has a maturity period of 10 years or more. Redeemable and Irredeemable Debts Redeemable Debts are terminable with a promise to pay on a future date Irredeemable Debts does not have a fixed final repayment date but is signed with a promise of regular interest payments Funded and Unfunded Debts In the Funded Debt, the borrower has to pay a fixed sum of interest with an option to repay the principal. In Unfunded Debts, the borrower has to repay the loan on a set due date with interest. The burden of Public Debt The burden of Public Debt refers to the repayment of the principal amount with interest and the tax burden is passed on to the citizens The burden of Internal Debt The burden of Internal Debt is not a direct burden as the money is borrowed from organizations and individuals within the country The burden of External Debt The burden of External Debt is a direct burden as the borrowed money has to be paid to foreign citizens or country. Shifting of Debt Burden (Public Debt and Future Generations) - Productive and unproductive loans - Sacrificing current investment and consumption - Short-term and long-term goals Management of Public Debt Management of Public Debt refers to the strategy of managing the debt to raise the required funding Framework for Public Debt Management - Debt management objectives and coordination - Accountability - Institutional framework - Debt management and risk management - The efficient market for government securities This video is on Public Debt and it has the following sub-topics. Time Stamps 0:00 Introduction 00:39 Role of Public Debt 01:08 Limitations of Public Debt 01:21 Types of Public Debt 01:41 Productive and Unproductive Debts 02:32 Voluntary and Compulsory Debts 03:13 Internal and External Debt 04:09 Short, Medium and Long Term Debt 04:45 Redeemable and Irredeemable Debts 05:21 Funded and Unfunded Debts 06:00 Burden of Public Debt 06:33 Burden of Internal Debt 07: 04 Burden of External Debt 07:42 Shifting of Debt Burden (Public Debt and Future Generations) 08:54 Management of Public Debt 09:32 Framework for Public Debt Management .