Economics • Indian EconomyMedium
Examine the composition of India's Balance of Payments. Which of the following transactions is recorded under the 'Current Account'?
A. External commercial borrowings raised by domestic corporate entities from international banks
B. Foreign direct investment equity inflows into domestic manufacturing joint ventures
C. Export and import of merchandise goods, software services, and unilateral transfer payments✓ Correct Answer
D. Acquisition of foreign reserve assets by the Reserve Bank of India in global currency markets
💡 Solution & Explanation
The Current Account records trade in merchandise goods, services, primary income, and secondary income including remittances and grants. Foreign direct investment and external commercial borrowings belong to the Capital and Financial Account of the balance of payments. A current account deficit occurs when total outlays on goods, services, and transfers exceed total receipts.
More Economics Indian Economy questions
- What is the primary objective of the 'National Monetisation Pipeline (NMP)' launched by the Government of…
- Analyze the implications of the 'Insolvency and Bankruptcy Code (IBC), 2016'. What primary systemic problem…
- Which central government welfare scheme guarantees up to one hundred days of wage employment in a financial…
- What does the 'Index of Eight Core Industries (ICI)' measure in the Indian economy?
- Which of the following components is included in calculating India's 'Current Account' in the Balance of…