Module: General Practice
Q37: Which of the following pairs is INCORRECTLY matched with its classification in India's Balance of Payments?
✅ Correct Answer: B
Software exports are Current Account transactions, not Capital.
Software exports fall under Services (Invisibles) within the Current Account.
Exporting software is the sale of a service/product.
It earns revenue (Income) but does not create a future repayment obligation (Liability) nor does it sell a national asset (like land or equity). Therefore, it fails the Capital Account test.
Software services are the single largest component of India's "Net Services" surplus, often buffering the Merchandise Trade Deficit.
Software exports fall under Services (Invisibles) within the Current Account.
Exporting software is the sale of a service/product.
It earns revenue (Income) but does not create a future repayment obligation (Liability) nor does it sell a national asset (like land or equity). Therefore, it fails the Capital Account test.
Software services are the single largest component of India's "Net Services" surplus, often buffering the Merchandise Trade Deficit.