Under Fiscal Policy,
Govt. borrows money from public through INR denominated bonds to Finance budget deficit,, budget deficit is exercised when there is Recessionary Gap so under this if govt borrows money from public then the public expenditure will decrease thereby decreasing consumption and as a whole AD falls.
so how public debt is a method followed under Fiscal policy.
Government can also finance its deficit through Ways and means advances (WMA) and monetize its fiscal deficit.