Question

Identify which of the following will appear on the debit side in the Capital Account of India’s Balance of Payments:

• A. An Indian sending remittances from England
• B. Investing in assets abroad by Indians
• C. An American company purchasing shares of an Indian company
• D. Export of spices from India

Hint:

Capital account debit entries indicate outflows of funds, such as investments abroad or repayment of loans.

Answer 1

The Correct Option is B

A debit entry in the Capital Account of the Balance of Payments (BoP) represents an outflow of funds.
Option (B): When Indians invest in assets abroad, there is an outflow of capital from India, which is recorded as a debit entry. 
Options (A), (C), and (D): These relate to current account transactions or represent capital inflows, which are credit entries.