Question

Give an account of India’s balance of payment situation during last two decades. Discuss the policy implications of emerging situation of Balance of Payment.

01 Dec 2020
Answer :
Word Count : 895

In the modern world, there is hardly any country which is self-sufficient in the sense that it produces all the goods and services it needs.

Every country imports from other countries the goods that cannot be produced at all in the country or can be produced only at an unduly high cost as compared to the foreign supplies.

Similarly, a country exports to other countries the commodities which those countries prefer to buy from abroad rather than producing at home. Besides, trade of goods and services, there are flows of capital. Foreign capital flows are in the form of portfolio investment by foreign institutional investors or in the form of foreign direct investment. The balance of payments is a systematic record of all economic transactions of residents of a country with the rest of the world during a given period of time.

This record is so prepared as to __________ _____ ____ ___ ________ __________ ____ ___ _____ ___ _____ ________.
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