UPPSC 2024 Prelims GS Paper-I · Question 120 of 150

Correct — B, A-2, B-3, C-1, D-4. The ranking comes from the World Bank's Migration and Development Brief, whose figures for 2022 were published on 13 June 2023: India first with about USD 111 billion, Mexico second with about USD 61 billion, China third with about USD 51 billion and the Philippines fourth with about USD 38 billion, with Pakistan fifth at roughly USD 30 billion. Mapping the four names in List-I onto those ranks gives Mexico second, China third, India first and the Philippines fourth — which is option (b). Two details make the year 2022 worth remembering rather than merely looking up. First, India's inflow grew about 24 per cent that year, and India became the first country in history to receive more than USD 100 billion in remittances in a single year. Second, remittances that year were unusually large in aggregate: officially recorded flows to low- and middle-income countries reached about USD 647 billion in 2022, an 8 per cent rise, and for many recipient economies they now exceed both foreign direct investment and official development assistance. Anchor and honest update: the exam was written on 22 December 2024, and the key rewards the 2022 table. In the most recent World Bank figures India remains comfortably first, at roughly USD 138 billion, with Mexico still second and the Philippines moving up to third — while China has slipped out of the top five altogether. So the top of the table has held, but the third and fourth places in this question are the parts that have since changed.

• (a)A-4, B-1, C-2, D-3 — Puts China first and India only second. China is a large recipient but has never displaced India at the top of the remittance table in recent years, and by 2022 the gap was more than two to one — about USD 111 billion to India against about USD 51 billion to China. This option also demotes Mexico from second to fourth, when Mexico's roughly USD 61 billion was clearly the second largest inflow.
• (c)A-3, B-4, C-2, D-1 — Makes the Philippines the world's largest recipient, which is far from the case — at about USD 38 billion it received roughly a third of India's inflow. The option is essentially the correct ordering read backwards, and it is the choice of a candidate who remembers that the Philippines is a famously remittance-dependent economy and confuses dependence (remittances as a share of GDP) with the absolute size of the inflow.
• (d)A-1, B-2, C-3, D-4 — The lazy-eye trap: it simply matches List-I to List-II straight down the page, A-1, B-2, C-3, D-4, without any recall of the actual figures. It would make Mexico first and India third. In every matching question, an option that pairs the lists in their printed order deserves extra suspicion rather than less.

Remittances are the money migrant workers send home. In balance-of-payments accounting they are 'private transfers' and belong to the current account, not the capital account — a distinction UPSC tests directly. They matter to India in three ways: they are the largest single source of non-debt-creating foreign exchange, they cushion the current account deficit and therefore reduce the risk of a currency crisis, and they support household consumption in the sending States. The World Bank, working with the KNOMAD partnership, publishes the standard country-wise estimates in its twice-yearly Migration and Development Brief; the RBI separately reports private transfer receipts in India's balance-of-payments data.

Match-the-list questions on international rankings are pure recall, but the recall load is small if you learn the shape of the table rather than four separate rows: India is far ahead, Mexico is a clear second, and then a cluster — China, the Philippines, Pakistan, Bangladesh, Egypt — fills the next places and reshuffles from year to year. Anchor the top two, and the rest of the option can usually be eliminated. Note the difference between two questions that sound alike: 'which country receives the most remittances' (answer: India, in absolute dollars) and 'for which country are remittances the largest share of GDP' (answer: small economies such as Tajikistan, Tonga or Nepal, never India, where they are a few per cent of GDP). UPPSC asked the absolute version here.

• Top remittance recipients in 2022 (World Bank Migration and Development Brief, press release 13 June 2023): India about USD 111 billion, Mexico about USD 61 billion, China about USD 51 billion, the Philippines about USD 38 billion and Pakistan about USD 30 billion.
• India's 2022 inflow grew roughly 24 per cent and made India the first country ever to cross USD 100 billion in remittances in a single year.
• Officially recorded remittance flows to low- and middle-income countries reached about USD 647 billion in 2022, an increase of about 8 per cent over the previous year.
• In the most recent World Bank data India remains first at roughly USD 138 billion, Mexico second and the Philippines third, while China has fallen out of the top five — the 2022 ordering in this question should not be carried forward as if it were permanent.
• Remittances are recorded as private transfers in the CURRENT account of the balance of payments; foreign loans, FDI and portfolio investment sit in the capital account.

• Confusing the largest recipient in dollars (India) with the country most dependent on remittances as a share of GDP (small economies such as Tajikistan, Tonga or Nepal).
• Putting remittances in the capital account. They are current-account private transfers; FDI, portfolio flows and external loans are capital account.
• Carrying the 2022 ordering forward to later years. China was third in 2022 but has since dropped out of the top five, and the Philippines has moved up.

UPPSC asks the ranking directly as a match-the-list item tied to a named year, so the year in the question stem decides the answer. UPSC almost never asks the ranking — it asks what remittances do: which account they belong to, and whether they reduce the risk of a currency crisis.

• practice — not a real PYQ

  In India's balance of payments, inward remittances from Indians working abroad are recorded under which head?

  • (a)Capital account, as portfolio investment
  • (b)Current account, as private transfers
  • (c)Capital account, as external commercial borrowing
  • (d)Errors and omissions

  Answer(b) Current account, as private transfers — remittances are unrequited transfers and are non-debt-creating, unlike external borrowing or portfolio inflows, which belong to the capital account.

• practice — not a real PYQ

  Which organisation publishes the 'Migration and Development Brief', the source of the widely quoted country-wise remittance figures?

  • (a)International Monetary Fund
  • (b)International Organization for Migration
  • (c)World Bank (with the KNOMAD partnership)
  • (d)United Nations Development Programme

  Answer(c) World Bank (with the KNOMAD partnership) — the Migration and Development Brief is issued by the World Bank's KNOMAD unit and is the standard source for global remittance estimates; the IMF publishes the World Economic Outlook and the UNDP the Human Development Report.