1) It saves the government from going into bankruptcy.
2) It checks extravagance on the part of the governments.
3) It preserves the confidence of the lenders.
4) It makes easy for the government to float future loans.
5) It reduces the cost of management of public debt.
6) It saves the future generations from the pressure of public debt.
7) The resources obtained after redemption of the debt would be diverted towards private investments and therefore a favorable climate for investment could be created.
8) Redemption of debt may act as a useful tool to curb deflation.
Judiesiz answered the question on July 10, 2018 at 07:00
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