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.
1 and 2 only
Incorrect Answer1, 2 and 3
Correct AnswerExplanation:
"Non-Financial debt” excludes the debt of Financial Institutions i.e. those institutions that borrow solely to re-lend and the money.
In other words if, NABARD, ILFS etc had borrowed money to re-lend it, then it’d be financial debt. And all other type of debt will be “non-Financial debt”
So, In above options, all three loans are taken by persons or entities who’ll not ‘re-lend’ it, but They will use the funds for their own purpose. Therefore, Answer should be “D”
Non-financial debt consists of credit instruments issued by governmental entities, households and businesses that are not included in the financial sector (NABARD,ILFS etc...)
Non- financial debt includes industrial or commercial loans, Treasury bills and credit card balances.
Hence all statements are correct.
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By: Abhipedia