UPSC Prelims 2019 – Question 63

Here is Question No. 63 a part of our series on UPSC Prelims 2019

Q63. Consider the following statements:

1. Most of India’s external debt is owed by governmental entities.
2. All of India’s external debt is denominated in US dollars

Which of the statements given above is/are correct?
(a) 1 only
(b) 2 only
(c) Both 1 and 2
(d) Neither 1 nor 2

Answer: D

• External debt refers to the money borrowed from a source outside the country which has to be paid back in the currency from which it is borrowed.
• Statement 1 is not correct: Commercial Borrowings continue to be the largest component of India’s external Debt followed by NRI deposits and short-term credit.
• Statement 2 is not correct: US dollar the US-denominated debt remained the largest component of India’s external debt, with a Share of 53.9 percent at end-June 2020, followed by the Indian rupee (31.6 percent), yen (5.7 percent), SDR (4.5 per cent) and the euro (3.5 per cent)

For UPSC Prelims Resources, Click here

For Daily Updates and Study Material:

Join our Telegram Channel – Edukemy for IAS

• 1. Learn through Videos – here
• 2. Be Exam Ready by Practicing Daily MCQs – here
• 3. Daily Newsletter – Get all your Current Affairs Covered – here
• 4. Mains Answer Writing Practice – here

Visit our YouTube Channel – here