(i) When planned expenditure of the Government exceeds the total revenue of the Government then the Government needs to borrow money from individuals and organisations. This is called public debt.
(ii) Redeemable public debt is the debt that the government promises to pay off at some predetermined future date. The government regularly pays interest on this debt. The principal amount is paid back on the expiiy of the due date. Therefore, in case of redeemable debt, the government has to make some arrangement for its repayment. Public debts are normally redeemable.
(iii)
• Loan raised for war.
• Loan raised for floods.
