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With reference to the Indian economy, consider the following statements: 1. A share of the household financial savings goes towards government borrowings. 2. Dated securities issued at market-related rates in auctions form a large component of internal debt. Which of the above statements is/are correct?

UPSC · 2022 · Economy
Question:
With reference to the Indian economy, consider the following statements: 1. A share of the household financial savings goes towards government borrowings. 2. Dated securities issued at market-related rates in auctions form a large component of internal debt. Which of the above statements is/are correct?

Options

1 only
2 only
Both 1 and 2
Neither 1 nor 2
Answer: Both 1 and 2

Explanation:
Household savings invested in government securities contribute to government borrowings. Dated securities issued through auctions are a major component of India’s internal debt.

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