gs1medium

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

  1. 1.Housing loans owned by household
  2. 2.Amounts outstanding on credit cards
  3. 3.Treasury Bills

Select the correct answer using the code given below:

  1. A.1 only
  2. B.1 and 2 only
  3. C.3 only
  4. D.1, 2 and 3
▶ Answer & Explanation

Correct answer: D. 1, 2 and 3

Non-financial debt refers to borrowing by entities other than financial institutions for purposes other than financial intermediation. Housing loans and outstanding credit card balances represent debt incurred by households for consumption or asset acquisition. Treasury Bills, on the other hand, are government securities issued to raise funds, and they represent a financial asset for the holder and a liability of the government (a financial entity in this context), not typically classified under non-financial debt in the private sector sense.

Source: UPSC gs1 2020

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