Public Debt is money borrowed by government from domestic and international sources. Composition: Domestic debt (issued within country, bonds/bills), External debt (borrowed internationally, foreign currency). Maturity: Short-term (treasury bills), Medium-term, Long-term (bonds). Cost: Government pays interest annually; burden increases with debt level and interest rates. Debt-to-GDP ratio: Key sustainability measure; higher ratios indicate greater debt burden; limits vary by country (emerging markets often target 60%). Impacts: Interest payments increase government spending, reducing resources for development; high debt may crowd out private investment; inflation risk if financed by money printing; external debt vulnerable to exchange rate changes. Debt sustainability: Depends on growth rate (faster growth eases burden), Primary balance (whether government spends less than receives before interest), Interest rates (lower rates reduce burden). Debt financing methods: Issuing bonds (attracting savings), Borrowing internationally (bilateral/multilateral), Using central bank (inflationary). Debt reduction: Fiscal surplus (balance primary accounts), Economic growth (increases GDP base), Inflation (if nominal debt fixed), Asset sales (privatization). Indian context: Total government debt significant; interest payments large budget component; external debt lower than domestic debt. ICAI focus: Debt components, sustainability indicators, burden implications. Exam tip: "Debt sustainability depends on growth rate and primary balance"; remember debt-to-GDP ratio is key metric.