UPSC General Studies Sample Paper General Studies Sample Paper-3

  • question_answer
    Which of the following is/are the resultants of the foreign investment in the National Manufacturing and Investment Zones (NMIZs)?
    1. Increase in India's Current Account Deficit (CAD).
    2. Supplement domestic expertise and resources.
    3. De-congestion of nearby urban areas.
    Select the correct answer using the codes given below.

    A)  2 and 3

    B)  Only 3            

    C)  1 and 2           

    D)  All of these

    Correct Answer: A

    Solution :

    [a] The Foreign Direct Investment (FDI) not come under the current account. It is the capital account includes Foreign Direct Investment (FDI), portfolio and other investments, plus changes in the reserve account. Hence, foreign investments in the National Manufacturing and Investment Zones (NMIZs) do not affect India's Current Account Deficit (CAD).

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