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?
- A. 1 only
- B. 2 only
- C. Both 1 and 2
- D. Neither 1 nor 2
Answer: D
Explanation
As per the Government report on External debt by December 2018-Commercial borrowings are the largest component of external debt with a share of 37.1 percent, followed by NRI deposits (23.9 percent) and short term trade credit (19.9 percent). Hence, Statement 1 is not correct. US dollar denominated debt continued to be the largest component of India’s external debt with a share of 45.9 percent at end December 2018, followed by the Indian rupee (24.8 percent), SDR (5.1 percent), yen (4.9 percent) and euro(3.1 percent). Hence, Statement 2 is not correct.