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:

1 only

1 and 2 only

3 only

1, 2 and 3

APEDIA

UPSC Prelims

2020 • 04 Oct, 2020 • Paper-1

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:

Correct Answer

1, 2 and 3

Concept of Non-Financial Debt: In macroeconomics, 'non-financial debt' refers to the total outstanding credit instruments issued by non-financial entities (spec......

💡 Analysis & Explanation

Concept of Non-Financial Debt ▼

In macroeconomics, 'non-financial debt' refers to the total outstanding credit instruments issued by non-financial entities (specifically governments, regular households, and standard corporate businesses). It strictly excludes debts incurred by financial institutions (like banks borrowing from the central bank or other banks).

Household Debt Assessment ▼

Borrowings taken by ordinary families, such as housing mortgages and revolving outstanding credit card balances, represent direct debt obligations of the non-financial household sector. Thus, items 1 and 2 are included.

Government Debt Assessment ▼

Treasury bills are short-term promissory debt instruments issued by the central government to finance its fiscal deficit. Since the sovereign government is definitively classified as a non-financial macroeconomic entity, treasury bills form a core part of non-financial public debt. Thus, item 3 is included.

Conclusion ▼

All three listed instruments are legitimate components of the overarching non-financial debt metric.

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In the context of the Indian economy, non-financial debt includes which of the following?1. Housing loans owed by households2. Amounts outstanding on credit cards3. Treasury billsSelect the correct answer using the code given below:

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: