UPSC Prelims 2019 · Question 13 of 99
UPSC Prelims 2019 question on India External Debt
- ExamUPSC CSE
- Year2019
- PaperGeneral Studies Paper I
- SubjectIndian Economy
- TopicExternal Sector of India
- DifficultyMedium
- TypeStatement
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?
Show answer
Answer: D. Neither 1 nor 2
Verdict
Neither statement 1 nor 2 is correct → Option (d).
Statement by statement
Statement 1 – INCORRECT: As per the Government report on External debt by December 2018, Commercial borrowings are the largest component of external debt with a share of 37.1 percent, followed by NRI deposits (23.9 percent) and short term trade credit (19.9 percent). Commercial borrowings are primarily from private entities, not governmental entities.
Statement 2 – INCORRECT: US dollar denominated debt continued to be the largest component of India's external debt with a share of 45.9 percent at end December 2018, followed by the Indian rupee (24.8 percent), SDR (5.1 percent), yen (4.9 percent) and euro (3.1 percent). Hence India's external debt is denominated in multiple currencies, not just US dollars.