Ethics of Accommodation


the aspect of double counting in the aggregation of public debt. It is well known that a major portion (75 per cent) of the states' debt is on account of loans taken from the Centre, and if no deduction is made to the extent of loans taken from the Centre, the aggregation of Central and states' debt would give an exaggerated picture of total public debt Similarly, the calculation of debt services involves double counting. For example, the interest charges of state governments include those paid to the Central government, while interest charges of the Central government include those on loans it has taken, irrespective of recoveries made from state governments and commercial departments.' It would have been better had interest charges paid by state governments on loans taken from the Centre been deducted, particularly when they are expressed as a percentage of national income to assess burden of debt.