Consider the following statements and select the correct answer from the codes given below the statements: Assertion [A]: Generally, India had a favorable balance of trade during the British rule. Reason [R]: The drain of wealth took the form of unrequited exports.

Both statements are true, and the reason explains the assertion. Under British rule India ran a merchandise surplus for most of the nineteenth century, so exports regularly exceeded imports. That surplus did not come back to India as goods or as payment in kind. Instead it was siphoned off as home charges, remittances, interest on sterling debt and salaries and pensions of British officials, which is the drain of wealth.

Core concept: the drain theory of Dadabhai Naoroji and R.C. Dutt. The favorable trade balance was real, but much of it was unrequited. Exports were paid for through the Company's revenue, not by imports of equal value. Hence the surplus was a transfer, not a gain.

• Option B is wrong because the reason does explain why the surplus turned into a drain.
• Option C is wrong because the reason is accurate; the 'unrequited export' idea is a standard feature of drain analysis.
• Option D is wrong because both parts are historically sound.

Mains angle: this links to deindustrialisation and the colonial economy, and to the debate on how British rule affected India's capital formation.

Trap: aspirants read 'favorable balance' as proof of prosperity and stop there, forgetting that the surplus was never repatriated to India.