Official Answer Key & Detailed Solution
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Correct Answer: Option (D) — Neither 1 nor 2
Concept & Option Breakdown
Standard Reference Verified- Statement 1 is incorrect: The majority (around 80%) of India's external debt is owed by non-government entities (commercial borrowings, trade credit, NRI deposits), while the government's share is only around 20%.
- Statement 2 is incorrect: While the US Dollar accounts for the largest share (over 50%), India's external debt is also denominated in Indian Rupees, Special Drawing Rights (SDR), Japanese Yen, Euros, and other currencies.
Extreme qualifiers like 'All' and 'Most' in macro-financial statistics are frequently used by examiners to craft incorrect statements.
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