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India’s Debt Dilemma: Investigating Threshold, Primary Surplus, and Institutional Quality

Pratibha Saini & Krishna Muniyoor

Journal of Emerging Market Finance2025https://doi.org/10.1177/09726527251345112article
AJG 2ABDC B
Weight
0.41

Abstract

A steady increase in India’s public debt (PD) during the post-COVID-19 phase, as in many other developing economies, has received significant scholarly attention. This study examines India’s debt sustainability based on debt threshold estimation, which, if exceeded, is likely to hinder economic growth and impede future surges. It explores the role of institutional quality (IQ) in stimulating economic growth and reducing the negative effect of PD on primary surplus by employing the quadratic autoregressive distributed lag bound test approach and the fiscal reaction function. Focusing on India, this study analyzes data from 1985 to 2023. The findings suggest that India has already surpassed the debt threshold of 76.83%, partly due to the acceleration of public expenditure during the COVID-19 pandemic. Moreover, while rising PD negatively affects primary surplus, IQ plays a significant role in alleviating this impact and fostering economic growth. JEL Codes: O43, H63, H68, C22, O53

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https://doi.org/https://doi.org/10.1177/09726527251345112

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@article{pratibha2025,
  title        = {{India’s Debt Dilemma: Investigating Threshold, Primary Surplus, and Institutional Quality}},
  author       = {Pratibha Saini & Krishna Muniyoor},
  journal      = {Journal of Emerging Market Finance},
  year         = {2025},
  doi          = {https://doi.org/https://doi.org/10.1177/09726527251345112},
}

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India’s Debt Dilemma: Investigating Threshold, Primary Surplus, and Institutional Quality

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Evidence weight

0.41

Balanced mode · F 0.40 / M 0.15 / V 0.05 / R 0.40

F · citation impact0.25 × 0.4 = 0.10
M · momentum0.55 × 0.15 = 0.08
V · venue signal0.50 × 0.05 = 0.03
R · text relevance †0.50 × 0.4 = 0.20

† Text relevance is estimated at 0.50 on the detail page — for your query’s actual relevance score, open this paper from a search result.