Question

As per the National Stock Exchange (NSE) data, dated 9th June, 2023, there was a net selling off worth 309 crore by Foreign Institutional Investors (FIIs) over the period of one month i.e., 9th May, 2023 - 9th June, 2023.
The above-mentioned transactions will be recorded on ------ side of ------ account of Balance of Payments of India.

• A. Debit, Current
• B. Credit, Capital
• C. Credit, Current
• D. Debit, Capital

Hint:

For Balance of Payments questions, remember that inflows (credits) and outflows (debits) are categorized under Current or Capital Accounts based on the nature of the transaction.

Answer 1

The Correct Option is D

Step 1: Understanding the context.
The sale of financial assets by Foreign Institutional Investors (FIIs) represents a capital outflow from India.
Step 2: Classification in Balance of Payments.
Such transactions are recorded on the debit side of the Capital Account because they signify a reduction in the country's liabilities to foreign entities.
Step 3: Conclusion.
The correct classification is \( \mathbf{Debit, Capital} \), so the answer is \( \mathbf{(D)} \).