G lobal public debt has almost crossed $100 trillion , a figure nearly equivalent to the global economy’s annual output. The International Monetary Fund forecasts that this debt could approach 100 per cent of global GDP by the end of this decade.

India, with a general government debt of approximately 81 per cent of GDP , is positioned slightly above the average for emerging markets. While this may appear manageable, a recent IMF working paper indicates that the margin for error is narrower than it seems. If the global community is indeed operating on borrowed time, India must ask whether it is also relying on borrowed trust.

The credibility premium

Central to this challenge is the concept termed P-Theory, outlined in IMF’s October 2025 working paper, “Maximum Sust

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