Q. Consider the following:
1.Earnings from software services exported by Indian companies.
2.Remittances received by resident households from relatives working abroad.
3.Interest paid by the Government of India on external sovereign borrowings.
4.Purchase of gold by an Indian household from a domestic jeweller.
Which of the above are reflected in India’s Balance of Payments (BoP)?
Answer: A
Notes:
Explanation
Explanation:
- Statement 1 is correct: Earnings from software services exported by Indian companies are recorded as exports of services under the Current Account of the Balance of Payments (BoP).
- Statement 2 is correct: Remittances received from relatives working abroad are recorded as secondary income (current transfers) in the Current Account.
- Statement 3 is correct: Interest paid on external sovereign borrowings is recorded under Primary Income in the Current Account, as it is a payment to non-residents.
- Statement 4 is incorrect: The purchase of gold from a domestic jeweller is a transaction between residents and therefore is not recorded in the Balance of Payments. Only imports of gold from abroad are reflected in the BoP.
Source- IE
