UPSC Prelims 2001 · General Studies
Question 50: Economy and Social Development
Consider the following: I. Market borrowing II. Treasury bills III. Special securities issued to RBI Which of these is/are component(s) of internal debt?
AnswerThe answer is (d).
All three are components of the Centre's internal debt. Internal debt covers what the government owes within the country: market borrowings (dated securities), treasury bills and special securities issued to the RBI, along with bonds and small-savings securities. External debt is what is owed to foreign governments and institutions. Remember that debt raised in the country in rupees is internal and debt owed abroad is external.
- I. Market borrowings through dated securities are internal debt.
- II. Treasury bills are internal debt.
- III. Special securities issued to the RBI are internal debt.
Why each option is right or wrong
- (a) Treasury bills and RBI securities also count.
- (b) Special securities issued to the RBI are also internal debt.
- (c) Market borrowing is also internal debt.
- (d) Right: all three are internal debt.
Explanation: written by UPSC Grade, not by UPSC.
Source: UPSC, Civil Services (Preliminary) Examination 2001, General Studies. UPSC's own paper isn't online; the words are from a published compilation. The paper on upsc.gov.in.