The primary difference between 'Public Debt' and 'Deficit Financing' is that public debt:

Solution

• Public Debt  refers to the total outstanding borrowings of a government. It is a  stock  concept. This borrowing can be from  the domestic public  (via bonds), from the  central bank , or from  foreign entities . Borrowing from the public (non-bank) is generally non-inflationary.
• Deficit Financing  in a narrower, traditional sense refers specifically to covering a fiscal deficit by  borrowing from the central bank  (RBI in India), which effectively leads to the  printing of new money . This is often directly inflationary.
  Therefore, the key distinction is that public debt encompasses all borrowing, while deficit financing is a specific (and potentially inflationary) method of covering a deficit.