Question:

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

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Capital account debit entries indicate outflows of funds, such as investments abroad or repayment of loans.
Updated On: Jan 30, 2025
  • An Indian sending remittances from England.
  • Investing in assets abroad by Indians.
  • An American company purchasing shares of an Indian company.
  • Export of spices from India.
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The Correct Option is B

Solution and Explanation

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.
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