Match List-I with List-II:
| List-I | List-II | ||
|---|---|---|---|
| (A) | Capital account in balance | (I) | Capital inflows are greater than capital outflows |
| (B) | Surplus in capital account | (II) | Capital inflows are equal to capital outflows |
| (C) | Deficit in capital account | (III) | Credit item on the capital account |
| (D) | Sale of shares of an Indian company to a foreign buyer | (IV) | Capital inflows are less than capital outflows |
Choose the correct answer from the options given below:
Answer & explanation
Correct answer: option 3
The correct answer is Option (3) → (A) - (II), (B) - (I), (C) - (IV), (D) - (III)
The capital account compares capital inflows with capital outflows. A sale of an asset to a foreigner is an inflow.
| List-I | List-II | Reason |
|---|---|---|
| (A) Capital account in balance | (II) Capital inflows are equal to capital outflows | Inflows and outflows are equal. |
| (B) Surplus in capital account | (I) Capital inflows are greater than capital outflows | More capital comes in than goes out. |
| (C) Deficit in capital account | (IV) Capital inflows are less than capital outflows | More capital goes out than comes in. |
| (D) Sale of shares of an Indian company to a foreign buyer | (III) Credit item on the capital account | Selling an asset abroad brings foreign exchange in. |
NCERT (2026-27): “6.1.2 Capital Account … On the other hand, sale of assets like sale of share of an Indian company to a Chinese customer is a credit item on the capital account. …” “Balance on Capital Account … Capital account is in balance when capital inflows (like receipt of loans from abroad, sale of assets or shares in foreign companies) are equal to capital outflows (like repayment of loans, purchase of assets or shares in foreign countries). Surplus in capital account arises when capital inflows are greater than capital outflows, whereas deficit in capital account arises when capital inflows are lesser than capital outflows.” |