Explanation
- A
1 only
(a) 1 only. Most of India’s external debt is owed by the private and non-government sector (commercial borrowings, NRI deposits, trade credit), not by governmental entities. Statement 1 is false.
- B
2 only
(b) 2 only. External debt is multi-currency: the US dollar is the largest share, not the whole. Rupee, SDR, yen, euro and others also appear. Statement 2 is false.
- C
Both 1 and 2
(c) Both 1 and 2. Both statements fail, so this option is not the key.
- D
Neither 1 nor 2
(d) Neither 1 nor 2. Government is not the main debtor, and the stock is not all dollar-denominated. That is the official key.
Summary. Official key is (d). India’s external debt is led by commercial borrowings, NRI deposits and trade credit, not by the sovereign. The dollar is the largest currency of denomination, not the only one. Both statements are therefore false. Honour (d).
Same topic · past papers
UPSC has asked this before
These previous-year questions sit on the same topic. Open one to practise the earlier ask.
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2022 · Q7 · General Studies · 2 marks
Which of the following activities constitute real sector in the economy? 1. Farmers harvesting their crops 2. Textile mills converting raw cotton into fabrics 3. A commercial bank lending money to a trading company 4. A corporate body issuing Rupee Denominated Bonds overseas Select the correct answer using the code given below: