110.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 ?

1 only
2 only
Both 1 and 2
Neither 1 nor 2

The correct answer is (c).

Statement 1 is correct. Household financial savings are a major source of funds for the government. In 2020-21, household financial savings accounted for 26% of gross domestic savings (GDS). This means that for every ₹100 that was saved in India in 2020-21, ₹26 came from households.

Statement 2 is also correct. Dated securities issued at market-related rates in auctions form a large component of internal debt. In 2020-21, dated securities accounted for 52% of the central government’s total internal debt. This means that for every ₹100 that the central government borrowed from domestic sources in 2020-21, ₹52 came from dated securities.

Therefore, both statements 1 and 2 are correct.

Exit mobile version