UPSC Prelims 2020 · GS Paper I
Question 54: Economy and Social Development
In the context of the Indian economy, non-financial debt includes which of the following ?
- 1.Housing loans owed by households
- 2.Amounts outstanding on credit cards
- 3.Treasury bills
Select the correct answer using the code given below :
AnswerUPSC’s answer is (d).
Non-financial debt means debt owed by the non-financial sectors: households, non-financial companies and the government. Housing loans and credit card dues are household debt, and Treasury bills are government debt, so all three count. Debt of banks and other financial institutions is classed separately.
- 1. Housing loans are household debt.
- 2. Credit card dues are household debt.
- 3. Treasury bills are government borrowing.
How you could have got this
- If you were sure statement 1 is correct, (c) goes: it leaves 1 out.
What you needed to know: Housing loans are household debt.
- Then, if you were sure statement 3 is correct, (a) and (b) go: each of them leaves 3 out.
What you needed to know: Treasury bills are government borrowing.
Only (d) is left. You didn’t need statement 2.
Which options go is worked out from UPSC’s key and the options, not by a model.
Why each option is right or wrong
- (a) Wrong: credit card dues and Treasury bills are also non-financial debt.
- (b) Wrong: leaves out Treasury bills, which are government debt.
- (c) Wrong: Treasury bills count, but so do household loans.
- (d) Right: all three are debt of non-financial sectors.
Answer: UPSC’s key. Explanation: written by UPSC Grade, not by UPSC.
Source: UPSC, Civil Services (Preliminary) Examination 2020, General Studies Paper I, Series A. The paper on upsc.gov.in.