Indian Economy·Prelims Questions

Balance of Payments — Prelims Questions

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Version 1Updated 7 Mar 2026

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Q1medium

Which of the following components are NOT part of India's Current Account in the Balance of Payments?

Q2hard

Consider the following statements regarding India's Balance of Payments (BOP): 1. A persistent Current Account Deficit (CAD) is always detrimental to the economy. 2. Foreign Exchange Reserves are recorded as a component of the Financial Account. 3. The Liberalized Remittance Scheme (LRS) primarily impacts the Capital Account for individuals. Which of the statements given above is/are correct?

Q3medium

Which of the following measures would likely lead to an improvement in India's Current Account Deficit (CAD) in the short term?

Q4easy

The 'twin deficit problem' in the context of India's Balance of Payments refers to the simultaneous occurrence of:

Q5medium

Which of the following statements about the Foreign Exchange Management Act (FEMA), 1999, is correct?