External Sector MCQ

Question 1

Consider the following statements regarding India's external debt borrower classification:
1. External debt is broken up into Government (Sovereign) and non-Government debt.
2. Non-Government debt is further categorised into financial, public and private sectors.
3. Long-term NRI deposits are included in the financial sector category.
Which of the statements given above are correct?

Accepted Answer

All three statements are true. The Department of Economic Affairs report states the Government/non-Government breakup, the further financial-public-private classification, and inclusion of long-term NRI deposits in the financial sector.

Question 2

Consider the following statements regarding restrictions under the Liberalised Remittance Scheme:
1. Remittance from India for margins or margin calls to overseas exchanges or overseas counterparties is not available under the scheme.
2. Remittance for trading in foreign exchange abroad is permitted under the scheme.
3. Capital account remittances to countries identified by FATF as non-cooperative countries and territories are not available under the scheme.
4. Providing PAN is optional for resident individuals sending outward remittances under LRS.
Which of the statements given above are correct?

Accepted Answer

Statements 1 and 3 are correct because RBI's FAQ lists both as unavailable under LRS. Statement 2 is incorrect: remittance for trading in foreign exchange abroad is a prohibited item under the scheme. Statement 4 is incorrect because PAN is mandatory for LRS transactions through authorised persons.

Question 3

Consider the following statements about the Foreign Trade Policy (FTP) 2023:
1. FTP 2023 came into force with effect from 1 April 2023.
2. FTP 2023 applies only to goods and excludes services.
3. The Central Government may amend the FTP by notification in public interest.
Which of the statements given above are correct?

Accepted Answer

Statement 1 is correct: FTP 2023 came into force on 1 April 2023. Statement 2 is incorrect because it covers provisions relating to export and import of goods and services. Statement 3 is correct: the Central Government can amend it by notification in public interest.

Question 4

Consider the following statements regarding the Liberalised Remittance Scheme (LRS):
1. Resident individuals, including minors, may remit up to USD 2,50,000 per financial year for permissible current or capital account transactions.
2. The scheme was introduced on February 4, 2004 with a limit of USD 25,000.
3. The scheme is available to corporates, partnership firms, HUFs and trusts.
4. If the remitter is a minor, the LRS declaration form need not be countersigned by the natural guardian.
Which of the statements given above are correct?

Accepted Answer

Statements 1 and 2 are correct. Statements 3 and 4 are incorrect because LRS is not available to those entities and a minor's form must be countersigned.

Question 5

Consider the following statements regarding the EPCG scheme:
1. EPCG allows import of capital goods for pre-production, production and post-production at zero customs duty, except goods in the negative list.
2. EPCG authorisation is valid for import for 24 months from the date of issue.
3. Restricted import items may be permitted under EPCG only after approval from the Exim Facilitation Committee at DGFT Headquarters.
4. Exports under Advance Authorisation, DFIA, Duty Drawback, RoSCTL and RoDTEP cannot be counted towards fulfilment of export obligation under EPCG.
Which of the statements given above are correct?

Accepted Answer

Statements 1, 2 and 3 are correct according to FTP 2023. Statement 4 is incorrect because exports under Advance Authorisation, DFIA, Duty Drawback, RoSCTL and RoDTEP are expressly eligible for fulfilment of export obligation under EPCG.

External Sector MCQ — 84 Practice Questions with Answers

Practice Questions

You've seen 5 of 84 sample questions

More questions (pack required)

Frequently Asked Questions

More Topics in Indian Economy

Monetary & Fiscal Policy

Economic Growth & Sustainable Development

Industrial Growth & Economic Reforms

Agricultural Development

Service Sector, Energy & Transport

Skill Development & Social Justice

Measurement of Development & HDI

Fiscal Federalism & Finance Commission

Statistical System of India

Power Sector

Bilateral Trade

Centralised Payment System

Public Finance

Atal Pension Yojana

Digital Governance

Payment Systems

Social Security Schemes

Financial Markets

GST Administration

GDP and Growth Forecasts

Industrial Policy

SEBI and Capital Markets

Customs Tariff

Venture Capital

Insurance & Maritime Trade

Rural Employment

Trade Agreements

International Organizations

Startup India Funding

Foreign Trade and Balance of Payments

Inflation and Growth

Energy Security

Inflation Statistics

Agricultural Procurement

Food Security

Startup Ecosystem

Macroeconomic Indicators

Credit Guarantee

Transport Infrastructure

RoDTEP Scheme

Civil Aviation Ministry

Power and Energy Demand

Production Linked Incentive

Infrastructure

Mining

Aviation Sector

RoDTEP Export Scheme

Agricultural Marketing

Agricultural Pricing

Energy Infrastructure

Agriculture Markets

National Accounts

Direct Taxes

Energy

Highway Tolling

Mining Sector Reform

Fertiliser Security

Electronic Toll Collection

Labour Force Participation

Economy

Free Trade Agreements

Free Trade Agreement

NITI Aayog Trade Watch Quarterly

GDP Estimates

Digital Payments

Textile Exports

Gender Statistics

Merchandise Trade Composition

Economic Concepts and Indian Economy

Energy Demand

General Knowledge

III. General Knowledge of World & India :

Rajasthan GK

Monetary Policy