Internal debt refers to the government's borrowings from sources within the country. - I. Market borrowing: This involves issuing government securities (both long-term dated securities and short-term Treasury Bills) for sale in the domestic financial market, purchased by banks, financial institutions, individuals, etc. This is a major component of internal debt. - II. Treasury bills (T-bills): These are short-term debt instruments issued by the government, typically for periods like 91, 182, or 364 days. They are part of market borrowing and are issued domestically, hence they are components of internal debt. - III. Special securities issued to RBI: When the government borrows directly from the Reserve Bank of India (RBI), it issues special securities or ways and means advances. Since the RBI is the central bank of India and is institutionally within the country, borrowing from the RBI constitutes internal debt.