Consider the following statements: 

1. When the interest rate on government debt is lower than the growth of GDP, the debt may decline but the financial market gets distorted.

2. Loans constitute the largest component of India's external debt, accounting for approximately 32.5% of the total.

Which of the statements given above is/are correct?

1
1 only
2
2 only
3
Both 1 and 2
4
Neither 1 nor 2

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