The correct answer is option 2, Current Account. According to the Union budget presented in the Parliament in 1994, the Indian rupee was made fully convertible in the current account.
To understand this, let`s first understand the concept of convertibility. Convertibility refers to the freedom to convert one currency into another. In the case of the Indian rupee, it means the ability to convert the rupee into other currencies and vice versa.
In this context, the current account refers to transactions related to the exchange of goods, services, and income between nations. The current account includes transactions like exports and imports of goods, payments for services like tourism and transportation, and income from investments abroad.
By making the rupee fully convertible in the current account, it means that individuals and businesses have the freedom to convert the rupee into other currencies for transactions related to trade in goods and services, as well as income from foreign investments.
It is important to note that the rupee was not made fully convertible in the capital account or savings account. The capital account includes transactions related to investments in financial assets like stocks, bonds, and real estate, while the savings account is related to personal savings and deposits in banks.
Therefore, the correct answer is option 2