With reference to external sector dynamics, Balance of Payments (BoP) accounting conventions, and budget receipt classifications reviewed in official Economic Surveys and Union Budgets, consider the following statements:
1. Commercial borrowings (including Commercial Paper and External Commercial Borrowings) constitute the largest component of India's total external debt stock.
2. Foreign cash grants received from sovereign nations and multilateral organizations are accounted for under Non-Tax Revenue Receipts in the Union Budget.
3. Private secondary income transfers, such as inward worker remittances, are recorded under the Capital Account of the Balance of Payments as capital inflows.
Which of the statements given above are correct?
- 1 and 2 onlyCevap
- B2 and 3 only
- C1 and 3 only
- D1, 2, and 3
Cevap
The correct combination is '1 and 2 only'.
Statements 1 and 2 are factual and conceptually sound. Commercial borrowings constitute the largest share of Indian external debt. Foreign cash grants add to government revenue without creating debt liabilities, placing them strictly under Non-Tax Revenue Receipts. Statement 3 is false because inward remittances are current transfer payments recorded in the Current Account.
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Balance of Payments Accounting and Union Budget Receipt Classification
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