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Ad hoc Treasury Bill System of meeting budget deficit in India was abolished on

  • A.31 march, 1997
  • B.31 march, 1996
  • C.1 april, 1992
  • D.1 april, 1995

Answer: A

The system was abolished on 31 March 1997.

Ad hoc treasury bills let the government finance its deficit automatically by issuing bills to the RBI, which amounted to unlimited monetisation. An agreement between the government and the RBI ended the practice and replaced it with Ways and Means Advances of limited amount and duration.

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