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Zorluk: OrtaIndustrial Policies, Infrastructure Sector, Balance of Payments, and External Trade

Regarding the structural classification of economic transactions in India's Balance of Payments (BoP), which of the following statements are correct?

  1. Foreign Direct Investment (FDI) inflows and Foreign Portfolio Investment (FPI) investments are recorded as entries under the Capital Account.Cevap
  2. External Commercial Borrowings (ECBs) raised by Indian corporate entities from non-resident lenders are categorized under the Capital Account.Cevap
  3. C
    Unilateral personal remittances sent by Non-Resident Indians (NRIs) for family maintenance are classified under the Capital Account.
  4. Interest payments made by domestic firms on foreign commercial loans are categorized under the Invisibles (Primary Income) section of the Current Account.Cevap

Cevap

The correct statements are those indicating that FDI/FPI flows belong to the Capital Account, External Commercial Borrowings belong to the Capital Account, and interest payments on foreign loans are categorized under the Current Account as part of investment income.
Foreign Direct Investment, Foreign Portfolio Investment, and External Commercial Borrowings directly modify the foreign financial asset and liability balances of an economy, so they are recorded under the Capital Account. Interest payments represent factor income outgo for using foreign funds and are correctly recorded under Primary Income in the Current Account.

Adım Adım Çözüm

1
Differentiate between Current Account and Capital Account items in BoP accounting.
Current Account records trade in goods, services (invisibles), primary income (interest, dividend, profit remittances), and secondary income (unilateral transfers/remittances). Capital Account records debt liabilities, asset creation, FDI, FPI, and loans.
Establishing clear accounting boundaries ensures correct classification of transactions.
2
Evaluate statements regarding FDI/FPI, ECBs, family remittances, and interest payments.
FDI, FPI, and ECBs alter financial liabilities/assets and belong to the Capital Account. Interest payments reflect income flows from investment and belong to the Current Account. Unilateral family remittances do not create future claims/liabilities, placing them in the Current Account.
Accurate placement depends on whether the transaction affects the foreign asset/liability position or represents income/transfers.

Anahtar Kavram

Balance of Payments Current Account vs Capital Account Classification
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Konular

Industrial Policies, Infrastructure Sector, Balance of Payments, and External Trade