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 only

2 only

Both 1 and 2

Neither 1 nor 2

APEDIA

UPSC Prelims

2019 • 02 Jun, 2019 • Paper-1

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?

Correct Answer

Neither 1 nor 2

Statement 1 Analysis: This is factually incorrect. The largest component of India's external debt is consistently held by the non-government sector (comprising ......

💡 Analysis & Explanation

Statement 1 Analysis ▼

This is factually incorrect. The largest component of India's external debt is consistently held by the non-government sector (comprising commercial borrowings, NRI deposits, and short-term debt), not by sovereign or governmental entities.

Statement 2 Analysis ▼

This is incorrect due to the absolute term 'All'. While the US dollar is the dominant currency for denomination, India's external debt is also significantly denominated in other major currencies including the Indian Rupee, SDR, Japanese Yen, and the Euro.

Conclusion ▼

Both statements contain fundamental factual errors, making option D correct.

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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?

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?