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This is a Literature Review study (also classified as: Observational).

August 21, 2025Open Access

Navigating Public Debt in Post-Covid India: Fiscal Prudence and Policy Responses (2014-2024)

Key Points

Public debt increased from 67.7% to 83.06% of GDP over the study period, reflecting fiscal challenges.
The gross fiscal deficit has widened, indicating a growing imbalance between revenue and expenditure.
Data analysis shows strong correlations between public debt and key expenditures, highlighting fiscal prudence needs.
The mixed stationarity results suggest that some economic indicators are stable, while others show unpredictable trends.

Abstract

This study examines public debt in post-COVID India from 2014 to 2024, focusing on fiscal prudence and policy responses. The data reveals a consistent rise in public debt, internal debt, and revenue expenditure, with the debt-to-GDP ratio increasing from 67.7% in 2014 to 83.06% in 2024. The Gross Fiscal Deficit has also widened, indicating a growing gap between revenue and expenditure. The unit root test suggests mixed stationarity results, implying that some economic indicators follow a stable trend while others exhibit randomness. The Augmented Dickey-Fuller test confirms that public debt is not stationary, meaning it fluctuates over time due to external factors. The correlation matrix indicates a strong relationship between public debt and revenue expenditure, developmental expenditure, and gross fiscal deficit. These findings highlight the urgent need for policy measures to manage fiscal stability. Keywords: Public Debt, Fiscal Deficit, Debt-to-GDP Ratio, Fiscal Prudence

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