CA Foundation · Business Economics · Indian Economy
India's merchandise exports in a year are ₹30 lakh crore and merchandise imports are ₹45 lakh crore. Net exports of services are +₹14 lakh crore and net primary and secondary income (including remittances) is +₹3 lakh crore. What is the current account balance?
The current account balance is a surplus of ₹2 lakh crore. The merchandise trade deficit of ₹15 lakh crore is offset by net services of ₹14 lakh crore and net income and transfers of ₹3 lakh crore, giving -15 + 14 + 3 = +2.
- ADeficit of ₹2 lakh croreCorrect
- BDeficit of ₹15 lakh crore
- CSurplus of ₹2 lakh crore
- DDeficit of ₹28 lakh crore
Explanation
Trade balance = 30 - 45 = -15. Add net services +14 gives -1. Add net income and transfers +3 gives +2... recheck: -15 + 14 + 3 = +2, so this is a surplus of ₹2 lakh crore. Option 'Deficit of ₹2 lakh crore' ignores the sign and is wrong.
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