Public debt and regional inequality in India: patterns, determinants, and implications
1Department of Finance, Insurance and Real Estate, College of Business, California State University Sacramento, Sacramento, CA 95819-6088 USA.
Geojournal
|February 28, 2022
Summary
Public debt in India shows a non-linear relationship with growth and development, with declining inequality but persistent inter-state disparities. Key determinants include lending rates, GDP growth, and foreign investment, influencing how states manage liabilities.
Area of Science:
- Economics
- Public Finance
- Regional Development
Background:
- Global economic and health crises have led to unsustainable public debt levels worldwide.
- The relationship between public debt and economic growth is complex, potentially hindering or promoting development.
- Previous studies indicate a non-linear relationship between debt and growth in developed and Indian economies.
Purpose of the Study:
- To examine the temporal and spatial patterns of state debt in India.
- To investigate the relationship between public debt, regional inequality, and development.
- To identify the determinants of central and state liabilities in India from 1980-81 to 2019-20.
Main Methods:
- Statistical analysis of geographical data for 29 states and 2 union territories.
- Descriptive statistics including dispersion, Gini coefficient, moving averages, and Theil entropy.
- Time series regression analysis to determine the factors influencing public debt.
Main Results:
- Declining inequality observed over the decades, yet significant inter-state inequality persists.
- Lending rate, GDP growth, and trade balance are negatively correlated with total central and state liabilities.
- Net FDI flows, GDP, trade balance, and foreign exchange reserves show a positive relationship with liabilities.
Conclusions:
- Both lagging and developed states are projected to incur high public debts.
- Lagging states may use debt for interest servicing and non-plan expenditure, while developed states may use it for interest and planned expenditure.
- Understanding these patterns is crucial for sustainable fiscal management and equitable regional development in India.
Related Concept Videos
01:26Equity Theory
15
Equity theory explains how our sense of fairness influences the dynamics of close relationships. Rooted in social psychology, the theory posits that individuals evaluate fairness by comparing the ratio of their contributions to the rewards they receive. Relationship satisfaction is highest when these ratios are perceived as balanced between partners, promoting mutual reciprocity and a sense of justice.Equity vs. Equality in RelationshipsEquity is distinct from equality. Fairness does not...
15
01:06Skewness
13.4K
The measures of central tendency calculated from a data set may not reveal much about its intrinsic distribution. If a plot is made of the data set’s values, the mean and the median may not only differ, but also the plot may have more values on one side of the central tendencies. Such a data set is said to be skewed towards that side.
The longer the tail of the plot on one side, the more skewed it is. The skewness of a data set’s values suggests that the measures of central tendency...
The longer the tail of the plot on one side, the more skewed it is. The skewness of a data set’s values suggests that the measures of central tendency...
13.4K
01:12Regional Terms
13.0K
Regional terms describe anatomy by dividing the body parts into different regions that contain structures involved in contributing similar functions. Using these terms helps increase the accurate description and identification of the particular region of interest or region affected by the disease.
Primarily, the human body has two major regions, the axial and appendicular regions. The axial region comprises regions from the head to the abdomen and makes up the central body axis. In contrast,...
Primarily, the human body has two major regions, the axial and appendicular regions. The axial region comprises regions from the head to the abdomen and makes up the central body axis. In contrast,...
13.0K
01:30Impact of Individuals on Individuals
29
Human behavior is intricately shaped by social influences that arise from interactions with others in diverse contexts. These influences not only mold beliefs and attitudes but also drive the regulation of behaviors through both direct communication and observational learning. The study of these processes falls within the domain of social psychology, which seeks to understand how individuals are affected by and affect those around them.Mechanisms of Social InfluenceDirect social influence...
29
01:08Outliers and Influential Points
4.6K
An outlier is an observation of data that does not fit the rest of the data. It is sometimes called an extreme value. When you graph an outlier, it will appear not to fit the pattern of the graph. Some outliers are due to mistakes (for example, writing down 50 instead of 500), while others may indicate that something unusual is happening. Outliers are present far from the least squares line in the vertical direction. They have large "errors," where the "error" or residual is the...
4.6K
01:27Depressive Disorders: Etiology
178
Depressive disorders result from a complex interplay of biological, psychological, and sociocultural factors, each contributing uniquely to the development and persistence of the condition. Understanding these factors provides critical insight into the multifaceted nature of depression.
Biological Factors in Depression
Biological predispositions significantly influence the risk of developing depressive disorders. Genetic studies highlight the role of variations in the serotonin transporter...
Biological Factors in Depression
Biological predispositions significantly influence the risk of developing depressive disorders. Genetic studies highlight the role of variations in the serotonin transporter...
178