Public finance term: ‘‘Deficit financing’’ in India generally means borrowing from whom? Identify the monetized source that increases base money. Choose the correct option.
General Knowledge
Indian Economy
Difficulty: Easy
Choose an option
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AThe Reserve Bank of India (monetization)
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BCommercial banks only
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CForeign governments
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DPublic via small savings
Answer
Correct Answer: The Reserve Bank of India (monetization)
Explanation
Concept
- In India’s budget context, deficit financing classically refers to borrowing from the RBI, i.e., money creation to fund the gap.
Final AnswerThe Reserve Bank of India (monetization)