In the context of the Indian economy, non-financial debt includes whic

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
This question was previously asked in
UPSC IAS – 2020
Non-financial debt refers to debt owed by sectors other than the financial sector. This includes debt of households, non-financial corporations, and the government.
– 1. Housing loans owed by households: Households are part of the non-financial sector. Housing loans are debt. Thus, this is non-financial debt. Correct.
– 2. Amounts outstanding on credit cards: Households are part of the non-financial sector. Credit card outstanding is debt. Thus, this is non-financial debt. Correct.
– 3. Treasury bills: Treasury bills are short-term debt instruments issued by the government. The government is part of the non-financial sector. Thus, government debt, including Treasury bills, is considered non-financial debt. Correct.
Total debt in an economy is often categorised into financial debt (debt within the financial sector) and non-financial debt (debt of households, corporations, and government). Non-financial debt is a key indicator of leverage in the real economy.
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