Economics · Economy
With reference to off-budget borrowings in India, consider the following statements: Statement I: Off-budget borrowings are not reflected directly in the Union Government's fiscal deficit even though they may create contingent or implicit liabilities for the government. Statement II: In many cases, such borrowings are undertaken by public sector entities with repayment obligations that are supported through government guarantees or budgetary transfers. Which one of the following is correct in respect of the above statements?
Verified Solution4 OptionsUpdated: October 2026👁️1 View
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- 1Both Statement I and Statement II are correct and Statement II explains Statement I.✓
- 2Both Statement I and Statement II are correct but Statement II does not explain Statement I.
- 3Statement I is correct but Statement II is incorrect.
- 4Statement I is incorrect but Statement II is correct.
Correct answer
Both Statement I and Statement II are correct and Statement II explains Statement I.
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