Principle of self liquidating debt datingtipstricksandadvice com
For instance, Treasury Bills are an instrument of credit extensively used as a means of short-term (usually 90 days) borrowing by the government, generally, for covering temporary deficits in the budgets. Long-term debts, on the other hand, are those repayable after a long period of time, generally, ten years or more.
It may be classified as follows: In particular, for instance, the government of India’s debt obligations includes: (1) Dated and non-terminable Rupee loans consisting: (a) Marketable long-term loans including the portion subscribed by the State Bank of India out of the rupee counterpart funds; (b) Dated loans issued by the Government to the Reserve Bank of India in exchange for ad hoc Treasury Bills outstanding; and (c) Miscellaneous debt such as the Prize Bonds issued in 1961.Unproductive loans do not add to the productive capacity of the economy, so they are not self-liquidating.Unproductive public loans thus cast a net burden on the community, as for their servicing and repayment purpose, government will have to resort to additional taxation. External public debt permits import of real resources.
External debt represents a claim of foreigners against the real income (GNP) of the country, when it borrows from other countries and has to repay at the time of maturity.(4) Other miscellaneous obligations of the Central Government constituting the internal public debt in India are: Compulsory Deposit Scheme, Gold Bonds, Public Provident Funds, and items of unfunded debts and special securities issued to the United States Embassy for the Rupee Counterpart funds since 1961, unclaimed balance of State Provident Funds, and other accounts such as General Family Pension Fund, the Hindu Family Annuity Fund, the Postal Insurance, Life Insurance, Life Annuity Fund, etc.