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?

Statement 1: Correct. Household financial savings flow into bank deposits, insurance, provident/pension funds and small savings, and a part of these funds is used to finance government borrowing directly or indirectly.
Statement 2: Correct. In India, dated government securities (G-Secs) issued through auctions at market-related rates constitute a major component of internal debt of the Central Government.

Therefore, both 1 and 2 are correct.