UPSC Previous Year Question | Prelims GS | 2022

With reference to the Indian economy, consider the following statements: 1. A share of the household financial savings goes towards government borrowings. 2. Dated securities issued at market-related rates in auctions form a large component of internal debt. Which of the above statements is/are correct?

  1. 1 only
  2. 2 only
  3. Both 1 and 2
  4. Neither 1 nor 2

Answer

Correct Answer

Both 1 and 2

Explanation

Both statements are correct: household financial savings (via banks, insurance, mutual funds) flow into government securities, and market-auctioned dated G-Secs form the largest component of India's internal debt.

Topics: dated government securities, economy, internal debt, public debt