UPSC CSE Prelims
Question 8
With reference to the Indian economy, consider the following statements :
- A share of the household financial savings goes towards government borrowings.
- Dated securities issued at market-related rates in auctions form a large component of internal debt.
Which of the above statements is/are correct ?
View correct answer and explanation
Correct answer: C
Correct Option: C (Both 1 and 2)
Explanation: Household financial savings support Government borrowing through banks, insurance, pension funds and securities; auctioned dated securities constitute a large part of domestic central debt.
Statement / Pair / Item-wise Analysis:
1. True / qualifies - Household savings indirectly or directly finance Government securities and borrowing.
2. True / qualifies - Dated Government securities are regularly auctioned at market-determined yields and dominate market borrowings.
Option-wise Analysis:
A. Incorrect-omits 2 even though Dated Government securities are regularly auctioned at market-determined yields and dominate market borrowings.
B. Incorrect-omits 1 even though Household savings indirectly or directly finance Government securities and borrowing.
C. Correct-selects exactly the correct statements/items identified above.
D. Incorrect-omits 1 even though Household savings indirectly or directly finance Government securities and borrowing.; omits 2 even though Dated Government securities are regularly auctioned at market-determined yields and dominate market borrowings.