Official Answer Key & Detailed Solution
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Correct Answer: Option (C) — Both 1 and 2
Concept & Option Breakdown
Standard Reference VerifiedStatement 1 is correct: Household financial savings (invested in bank deposits, life insurance, provident funds, small savings schemes, and mutual funds) are mobilized by financial intermediaries to invest in Central and State Government Securities (G-Secs and SDLs), thereby directly and indirectly financing government borrowings.
Statement 2 is correct: Marketable dated securities issued through Reserve Bank of India auctions at market-determined yields constitute the largest share (over 65–75%) of the Central Government's total internal debt.
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