UPSC Prelims 2019 · GS Paper I
Question 63: Economy and Social Development
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?
AnswerUPSC’s answer is (d).
Neither statement is correct. Most of India's external debt is owed by non-government borrowers, mainly commercial borrowings by companies, NRI deposits and trade credit, and government debt is a smaller part. It is also not all in US dollars: the dollar has the largest share, but the rest is in the Indian rupee, SDR, Japanese yen, euro and other currencies.
- 1. Most external debt is owed by non-government entities.
- 2. The debt is spread across several currencies, not only the US dollar.
How you could have got this
- If you were sure statement 2 is not correct, (b) and (c) go: each of them includes 2.
What you needed to know: The debt is spread across several currencies, not only the US dollar.
The red flag in statement 2 is “all”. In UPSC’s papers, statements with “all” were true 41% of the time (76 statements). A hint, not a rule.
- Then, if you were sure statement 1 is not correct, (a) goes: it includes 1.
What you needed to know: Most external debt is owed by non-government entities.
Only (d) is left. This one needs every statement.
Which options go is worked out from UPSC’s key and the options, not by a model.
Why each option is right or wrong
- (a) Most external debt is owed by non-government entities, so statement 1 is false.
- (b) Not all of the debt is in US dollars.
- (c) Both statements are false.
- (d) Correct: both statements fail.
Answer: UPSC’s key. Explanation: written by UPSC Grade, not by UPSC.
Source: UPSC, Civil Services (Preliminary) Examination 2019, General Studies Paper I, Series A. The paper on upsc.gov.in.