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How much public debt is threshold in India?

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  • Debi Prasad Bal

    (Birla Institute of Technology and Science, Pilani, Pilani Campus)

Abstract

The study examines the threshold level of India's public debt from 1970 to 2019. The ARDL method finds that a country’s public debt is driven mainly by its gross fiscal deficit, real interest rate, and economic growth. In addition, the ratio of public debt to GDP has been used by the genetic algorithm method. The findings show that the ratio of public debt to GDP must be at most 61–64% in India. According to the results of this study, economic development is boosted when the national debt falls below a threshold level. Therefore, the current idea of public debt is supported by modern theory on public debt.

Suggested Citation

  • Debi Prasad Bal, 2025. "How much public debt is threshold in India?," Journal of Social and Economic Development, Springer;Institute for Social and Economic Change, vol. 27(1), pages 105-119, April.
    • Handle: RePEc:spr:jsecdv:v:27:y:2025:i:1:d:10.1007_s40847-023-00308-2
    DOI: 10.1007/s40847-023-00308-2
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    More about this item

    Keywords

    Public debt-to-GDP ratio; Genetic algorithm; Economic growth;
    All these keywords.

    JEL classification:

    • C63 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling - - - Computational Techniques
    • H68 - Public Economics - - National Budget, Deficit, and Debt - - - Forecasts of Budgets, Deficits, and Debt
    • O23 - Economic Development, Innovation, Technological Change, and Growth - - Development Planning and Policy - - - Fiscal and Monetary Policy in Development

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