Which among the following is / are components of Internal Debt?
1. Market Borrowings
2. Treasury Bills
3. Special securities issued to RBI
Choose the correct option from the codes given below:

Answer: [D] 1, 2 & 3

Internal debt is that part of the total debt that is owed to lenders within the country. It is the money the government borrows from its own citizens. The government borrows by issuing the Government Bonds and T-Bills (Treasury Bills). It also includes the Market borrowings by the government. The government bonds and T-Bills are traded in the market which is also known as Gilt Market.Please note that when government borrows from the domestic sources, the increase in inflation is less in comparison to simply printing the money and increased the more liquid forms of wealth (i.e., the money supply).

This question is a part of GKToday's Integrated IAS General Studies Module