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CSEET · Economic and Business Environment · Global Environment

In a year, India's merchandise exports are ₹300 crore and imports ₹450 crore; net services receipts are ₹120 crore; net primary and secondary income receipts (including remittances) are ₹80 crore. What is the current account balance?

The current account shows a surplus of ₹50 crore. The trade deficit of ₹150 crore is offset by net services of ₹120 crore and net income and transfers of ₹80 crore, giving minus 150 plus 120 plus 80 equals plus 50.

  1. ADeficit of ₹70 croreCorrect
  2. BDeficit of ₹150 crore
  3. CSurplus of ₹50 crore
  4. DSurplus of ₹250 crore

Explanation

Trade balance = 300 − 450 = −150. Adding net services 120 gives −30. Adding net income and transfers 80 gives +50? Check: −150 + 120 = −30; −30 + 80 = +50, a surplus of ₹50 crore. So the correct figure is a surplus of ₹50 crore, option 3; the deficit of ₹150 crore is only the trade balance, and the ₹70 crore deficit comes from subtracting the income items.

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