Public debt sustainability has garnered importance in the macroeconomic policy making of India, especially since the 1980s. This paper discusses the effectiveness of macroeconomic policies to tackle the issue of debt sustainability considering the inter-dependencies between various macroeconomic indicators under the four sectors: the real, monetary, fiscal, and external sectors. To this end, we estimate a structural equation model with 14 equations, which is further incorporated into the debt sustainability analysis using an indicator-based approach. The structural equations are estimated using the generalised method of moments, and the data cover annual samples for central government finances from 1981-82 through 2019-20. The simulation exercises reveal that fiscal policy is more effective than monetary policy in improving the debt sustainability indicators of India. Further, fiscal policy through changes in capital expenditure is found to outperform policy action through changes in revenue expenditure.