This study focuses on analysing the differences and similarities between debt financing and equity financing systems in India. Hence, this gathered secondary sources of data on the involvement of the Indian economy in both debt and equity financing. It gathered data from a time limit of 2018 to 2023 to assess the current condition. This study found that both financing system is effective based on their individual advantages and disadvantages. Hence, this research process suggested that a company needs to choose such liquidity sources based on company needs and risk factors. Keywords: debt financing, equity financing, Indian economy, business, liquidity, loan