Economics • Indian EconomyHard
Evaluate the composition of India's Balance of Payments accounts. Which of the following specific transactions is recorded under the 'Capital Account'?
A. Export and import of engineering consultancy services and software products
B. Remittances sent by non-resident Indian workers to their families residing domestically
C. External commercial borrowings raised by domestic corporate manufacturing firms✓ Correct Answer
D. Unilateral financial grants received from international charitable organizations for disaster relief
💡 Solution & Explanation
External commercial borrowings represent international debt transactions that alter the foreign assets and liabilities of the country, thereby being recorded under the Capital Account of the Balance of Payments. Export of services, worker remittances, and unilateral grants are categorized under the Current Account. The capital account tracks foreign direct investment, portfolio investments, and external loans.
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