Module: General Practice
Q34: In the structure of India’s Balance of Payments, "Invisibles" are a critical component of the Current Account. Which of the following is NOT a sub-component of Invisibles?
✅ Correct Answer: C
Merchandise is a "Visible" item, not an Invisible one.
The Current Account is structurally divided into Visibles (Merchandise Trade) and Invisibles.
Visibles: Tangible goods (Crude oil, Electronics, Textiles). These are recorded at customs.
Invisibles: Intangible flows, further classified into: Services: Travel, Transport, Software, Insurance.
Income (Primary Income): Returns on investment (Interest on loans, Dividends on equity). Transfers (Secondary Income): Unilateral receipts like Remittances (where India is a global leader, estimated ~$125bn in 2024-25). Merchandise is excluded from "Invisibles" because it involves the physical movement of goods, which can be "seen" (visible) at ports/borders.
The Current Account is structurally divided into Visibles (Merchandise Trade) and Invisibles.
Visibles: Tangible goods (Crude oil, Electronics, Textiles). These are recorded at customs.
Invisibles: Intangible flows, further classified into: Services: Travel, Transport, Software, Insurance.
Income (Primary Income): Returns on investment (Interest on loans, Dividends on equity). Transfers (Secondary Income): Unilateral receipts like Remittances (where India is a global leader, estimated ~$125bn in 2024-25). Merchandise is excluded from "Invisibles" because it involves the physical movement of goods, which can be "seen" (visible) at ports/borders.