Balance of payment on current and capital account:
Balance of Payment on Current Account
Money sent and received on Export/Import in goods and services goes here.
Since the money we spend importing crude oil, it is quite larger than the money we make while exporting stuff.
So for India, Import >> Export
So Money going >> Money coming in making us DEFICIT in Current Account
In short money inflow and outflow via import-export is classified in Current Account
Balance of Payment on Capital Account
NRIs sending money from Dubai and America (Remittance from abroad)
Loans taken from IMF, World Bank
Tata buys British Company, some Japanese company buys Indian company…, that kind of money is also counted in here.
ONGC buys some oil reserve in Russia, some French company buys thorium mine in India, that kind of money is also counted here (rights over natural resources)
In short investment and borrowing goes here in Capital Account