Consider the following statements:
- Most of India’s external debt is owed by governmental entities.
- All of India’s external debt is denominated in US dollars.
Which of the statements given above is/are correct?
[UPSC Civil Services Exam – 2019 Prelims]
(a) 1 only
(b) 2 only
(c) Both 1 and 2
(d) Neither 1 nor 2
Answer: (d)
Explanation:
- Statement 1 is incorrect. According to the information provided, commercial borrowings are stated to be the largest component of external debt with a share of 37.4%, followed by NRI deposits (24.1%) and short-term trade credit (19.9%).
- Statement 2 is also incorrect. The data states that US dollar-denominated debt is the largest component of India’s external debt with a share of 45.9% as of the end of December 2018. It is followed by the Indian rupee (24.8%), SDR (5.1%), yen (4.9%), and euro (3.1%).
