The 'Consolidated Sinking Fund' (CSF), maintained by many State Governments in India, is specifically designed to accumulate resources over time for the purpose of redeeming the state's outstanding ___.
- product
- TRIMs (or Trade-Related Investment Measures)
- low (or zero / no)
- open market borrowings (or debt / bonds)
Answer: open market borrowings (or debt / bonds)
To prevent the sudden, massive fiscal shock of having to repay a large bond maturity in a single year, states contribute a small percentage of their outstanding debt to the CSF annually. This fund is invested in safe, interest-bearing government securities. When the state's bond matures, it uses the accumulated corpus to pay off the principal, ensuring smooth and disciplined debt management.