UPSC CSE Prelims
Question 37
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:
View correct answer and explanation
Correct answer: D
Correct Option: D (1, 2 & 3)
Explanation: Non-financial debt is borrowing owed by non-financial sectors such as households and governments; housing loans, credit-card balances and government Treasury bills all count.
Statement / Pair / Item-wise Analysis:
1. Correct - Household mortgage borrowing is private non-financial debt.
2. Correct - Credit-card receivables are household debt obligations.
3. Correct - Treasury bills are debt issued by the non-financial general-government sector.
Option-wise Analysis:
A. Incorrect-omits correct item 2 (Credit-card receivables are household debt obligations); omits correct item 3 (Treasury bills are debt issued by the non-financial general-government sector).
B. Incorrect-omits correct item 3 (Treasury bills are debt issued by the non-financial general-government sector).
C. Incorrect-omits correct item 1 (Household mortgage borrowing is private non-financial debt); omits correct item 2 (Credit-card receivables are household debt obligations).
D. Correct-includes all and only valid statements/items 1, 2, 3.
Review note: “Non-financial debt” labels the debtor sector, not the nature of the lender or whether the instrument bears interest.