Public debt can affect the income distribution in different directions, depending on how the debt is used. The interest payments by public sector can also have impacts on income distribution. Public domestic borrowing in Turkey decreased since 2000s. This study informs about the public debt in Turkey in 2000s. The developments related to income distribution are analysed using income decomposition method and the related data. It is found that decreasing borrowing demand of public sector and decreasing real interest rate occurred simultaneously with decreasing financial income of households and this can have an improving effect on income distribution.