UPSC Prelims 2004·GS1·economy·open economy

Assertion (A): For the first time, India had no trade deficit in the year 2002-2003. Reason (R): For the first time, India’s exports crossed worth $50 billion in the year 2002-03.

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  1. ABoth A and R are individually true and R is the correct explanation of A
  2. BBoth A and R are individually true but R is not the correct explanation of A
  3. CA is true but R is false
  4. DA is false but R is trueCorrect

Explanation

Assertion A is false because India did not have a trade surplus in 2002-2003. In fact, India has consistently maintained a trade deficit in its merchandise trade since independence, except for two specific years: 1972-1973 and 1976-1977. While India did achieve a surplus in its Current Account during the period from 2001 to 2004, the trade balance itself remained negative. Reason R is true because India’s merchandise exports did indeed cross the 50 billion dollar mark for the first time during the 2002-2003 fiscal year, marking a significant milestone in the countrys trade growth. Since the assertion is false and the reason is true, option D is the correct answer.
economy: Assertion (A): For the first time, India had no trade deficit in the year 2002-2003. Reason (R): For the first time, Ind
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