Remittances as secondary income outflows Steps:

• The Kenyan banker resides and works in India, making India the host country and Kenya the home country.
• Sending wages to Kenya constitutes a remittance, classified as secondary income (personal transfers) in the balance of payments.
• For India, this outflow reduces net secondary income.
• The "other country" refers to India, as the transaction impacts its current account.

Why A is correct:

• Secondary income includes remittances; outflows decrease India's net secondary income per IMF balance of payments manual.

Why the others are wrong:

• B: Balance of trade in services covers service exports/imports, not personal transfers like remittances.
• C: The outflow reduces India's current account surplus by decreasing secondary income.
• D: Remittances increase secondary income for Kenya, not primary income (which covers wages and investments).

Final answer: A