Prelims 2020 · Economy · Question 84
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:
Answer
1, 2 and 3
1. Housing loans owed by households — Correct. Household borrowing is part of the non-financial sector debt; housing loans are a standard component of household debt.
2. Amounts outstanding on credit cards — Correct. Credit card dues are liabilities of households and are included in household/non-financial debt.
3. Treasury bills — Correct. Non-financial debt covers debt of non-financial sectors, including general government debt. Treasury bills are short-term liabilities of the government, so they are included in non-financial debt.
Therefore, 1, 2 and 3 are included. My earlier error was treating Treasury bills only as financial assets for holders; in debt classification, they are also government liabilities, hence part of non-financial debt.