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:

QUESTION

Medium

Economy

Prelims 2020

In the context of the Indian economy, non-financial debt includes which of the following?

Housing loans owed by households
Amounts outstanding on credit cards
Treasury bills

Select the correct answer using the code given below:

Select an option to attempt

Explanation

Statement 1 is Correct: Housing loans are credit obligations incurred by households. Since households are a primary component of the non-financial sector, their debt is classified as non-financial debt.

Statement 2 is Correct: Amounts outstanding on credit cards represent consumer debt owed by individuals (households) to banks or financial institutions. As this debt is owed by the non-financial sector, it is included in non-financial debt.

Statement 3 is Correct: Treasury bills (T-bills) are short-term debt instruments issued by the Government of India to manage its liquidity. The government is considered part of the non-financial sector, making its borrowings like T-bills and G-Secs part of non-financial debt.

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