Consider the following statements and select the correct answer from the codes given below the statements: Statement-I: Generally India had a favourable balance of trade during the British rule. Statement-II: The drain of wealth took the form of unrequited exports.

- Statement-I: Generally, India had a favourable balance of trade during the British rule. This is true in terms of visible trade (merchandise exports minus imports). India consistently exported more goods than it imported throughout much of the British period. - Statement-II: The drain of wealth took the form of unrequited exports. This is also true. The 'drain of wealth' theory, articulated by figures like Dadabhai Naoroji, argued that despite having a trade surplus, India did not benefit from it because the surplus was used to make 'payments' to Britain for various services, profits, pensions, etc., which did not result in any reciprocal import of goods or services for India. These exports were therefore "unrequited" from India's perspective. - Statement-II explains Statement-I because the favourable balance of trade (export surplus) was the mechanism through which the drain of wealth occurred. The export surplus generated the funds in Britain that were then appropriated as 'drain' payments, essentially meaning that India's exports were paying for British expenses or profits, not generating a return flow of goods/services to India.