gs1medium

With reference to the Indian economy, consider the following statements :

  1. 1.A share of the household financial savings goes towards government borrowings.
  2. 2.Dated securities issued at market-related rates in auctions form a large component of internal debt.

Which of the statements given above is/are correct ?

  1. A.1 only
  2. B.2 only
  3. C.Both 1 and 2
  4. D.Neither 1 nor 2
▶ Answer & Explanation

Correct answer: C. Both 1 and 2

Household financial savings, a significant source of funds in India, are channeled into various financial instruments, including government securities, thereby contributing to government borrowings. The Indian government primarily finances its fiscal deficit through market borrowings, with dated securities auctioned at prevailing market rates constituting the largest portion of its internal debt.

Source: UPSC gs1 2022

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