Which of the following indicates a balance of payments deficit?

Answer & explanation

Correct answer: option 4

The correct answer is Option (4) → Autonomous payments > autonomous receipts

The BoP is in deficit when autonomous payments are more than autonomous receipts. Accommodating transactions then fill that gap, so they cannot be the measure of it.

Option (1) Capital account payments > capital account receipts — Incorrect. This is only a capital account deficit; the current account may cover it.

Option (2) Current account receipts > current account payments — Incorrect. This is a current account surplus.

Option (3) Accommodating payments > accommodating receipts — Incorrect. Accommodating items respond to the gap; they do not define it.

Option (4) Autonomous payments > autonomous receipts — Correct. Autonomous payments above autonomous receipts leave a BoP deficit.

NCERT (2026-27): “Autonomous and Accommodating Transactions … The balance of payments is said to be in surplus (deficit) if autonomous receipts are greater (less) than autonomous payments. Accommodating transactions (termed ‘below the line’ items), on the other hand, are determined by the gap in the balance of payments, that is, whether there is a deficit or surplus in the balance of payments. In other words, they are determined by the net consequences of the autonomous transactions. Since the official reserve transactions are made to bridge the gap in the BoP, they are seen as the accommodating item in the BoP (all others being autonomous).”