Consider the following statements : The Indian rupee is fully convertible I. in respect of Current Account of Balance of Payment. II. in respect of Capital Account of Balance of Payment. III. into gold. Which of these statements is/are correct ?

Statement I is correct: since the 1991 reforms the Reserve Bank of India permits full conversion of the rupee for transactions under the current account of the Balance of Payments, a policy described as making the rupee fully convertible on the current account (including the 1993 move) [1]. Statement II is incorrect: convertibility on the capital account remains only partial and subject to controls, not full convertibility [2]. Statement III is incorrect: modern convertibility regimes for the rupee refer to conversion into foreign currencies for current or capital transactions, not automatic convertibility into gold; furthermore, current-account liberalisation still retains a few specific procedural exceptions (e.g., limits and approvals) [3].

Sources

1. [1] Indian Economy, Vivek Singh (7th ed. 2023-24) > Chapter 2: Money and Banking- Part I > Current Account Convertibility: > p. 109
2. [2] Indian Economy, Vivek Singh (7th ed. 2023-24) > Chapter 6: Indian Economy [1947 – 2014] > Following lists down the details of the major reforms carried out in June-July 1991: > p. 216
3. [3] Indian Economy, Nitin Singhania .(ed 2nd 2021-22) > Chapter 17: India’s Foreign Exchange and Foreign Trade > CONVERTIBILITY OF INDIAN RUPEE > p. 499