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:
[UPSC Civil Services Exam – 2020 Prelims]
(a) 1 only
(b) 1 and 2 only
(c) 3 only
(d) 1, 2 and 3
Answer: (d)
Explanation:
Debt Financing mainly includes two types of debts-
Public Debt-
It is the total amount borrowed by the government of a country.
- It is further divided into two types-
- Internal Public Debt
- External Public Debt
Non-Financial Debt-
- It consists of credit instruments issued by government entities, households, and business which are not covered in the financial sector.
- Housing loans owed by households, Amounts outstanding on credit cards, Treasury bills, Credit Card balance etc. are types of nonfinancial debts. Hence 1 2 and 3 are correct.