The government borrows in the bond and money markets to __:
1. Fund its fiscal deficit
2. Repay outstanding loans
3. Provide stimulus to economy
4. Fund infrastructure
Choose the correct option from the codes given below:
The amount the government borrows in the bond and money markets to fund fiscal deficit is referred to as net borrowings of the government. It also borrows to repay outstanding loans which if added to the net borrowings constitute gross borrowings. The government is the biggest borrower in the debt market. Kindly note that around three fourth of the total bond issuance in the Indian markets is accounted for by government securities. The difference between the fiscal deficit and the net borrowings is funded from other sources such as special deposits, state provident funds et al.
This question is a part of GKToday's Integrated IAS General Studies Module