UPSC Previous Year Question | Prelims GS | 2019

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?

  1. 1 only
  2. 2 only
  3. Both 1 and 2
  4. Neither 1 nor 2

Answer

Correct Answer

Neither 1 nor 2

Explanation

The largest component of India's external debt is commercial borrowings (private sector), not government debt, and only around half of the debt is US dollar-denominated - the rest is in rupees, yen, SDR, euro, etc. Neither statement is correct.

Topics: composition of india's external debt, external debt, external sector, indian economy