UPSC Prelims 2020·GS1·economy·money and banking

In the context of the Indian economy, non-financial debt includes which of the following? 1. Housing loans owed by households 2. Amounts outstanding on credit cards 3. Treasury bills Select the correct answer using the code given below:

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  1. A1 only
  2. B1 and 2 only
  3. C3 only
  4. D1, 2 and 3Correct

Explanation

Non-financial debt refers to debt held by non-financial entities — households, non-financial corporations, and the government (as opposed to debt held by banks and financial institutions). 1. Housing loans owed by households: Households are non-financial entities. Their borrowings (mortgages, home loans) form a core part of non-financial debt. ✓ 2. Amounts outstanding on credit cards: Credit card balances are consumer debt owed by households — a non-financial sector entity. ✓ 3. Treasury bills: T-bills are debt instruments issued by the government. The government is a non-financial entity, and its borrowings are counted as non-financial debt (specifically, government/public debt — a sub-category of total non-financial debt). ✓ All three — household debt, consumer credit, and government securities — are classified as non-financial debt. The correct answer is 1, 2 and 3.
economy: In the context of the Indian economy, non-financial debt includes which of the following? 1. Housing loans owed by house
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