Debt sustainablility

Debt sustainablility is defined as the ability of the State to maintain a constant debt-GSDP ratio over a period of time and also embodies the concern about the ability to service its debt.

Sustainability of debt therefore also refers to sufficiency of liquid assets to meet current or committed obligations and the capacity to keep balance between costs of additional borrowings with returns from such borrowings.

It means that rise in fiscal deficit should match with the increase in capacity to service the debt.