Unit 4 Bop

nd palance of Payments 4 253 petri es hi 5 Pe con's BE increased significant i oO 1990-91 export of no perolte ee cone of eid { it oPreased (0 1,00/125 crore tfleum products wm Re O40 a { i | 7 aiance of Payments crore, wile i i gia’? fi ; ple ba! lance of payments is a serious our? cen it will be better chore of India, Bef wJio. Before an extesi an a SR fers t et oe rrceg fl economic nection f of Pa has to deal with a val \o county pase i other countries in respect of three iter i) Vii ron na ce dd rule heme Tes a ee ’ e 7 pert series workers’ remittances. (ii) Capital Tues, These pital payments like investment by foreigners in Indi. mes? TsO with capital receipt dinary 22 ‘each country has to work out a balance i 2 ; work in respect of its dealings, i veeite™s with other ae of the world ina given period. Thus, itcomesto ett rpother countries and how much ithas to receive from other countries and what is the position hha balance may assume any one ofthe three positions; (i) balanced, (i) negetive positive (favourable). ce in the value of imports and exports of only physical goods or When the difference in the value ofimporisand expors When the differen led Balance of Trade. i ital transfers, i taken into account, itis called Balance inacount, itis 2 visible, invisible and capi dofall economic transactions of a country,in& aod of time, with rest of the world. ee ie, ‘overall reco! \{Features of Balance of Pa! 3h sfelbeeters; | le ments, Balance of PATMEN yments ‘hin features of balanee of payments are under: ets (systematic Record Itis asystematicrecord of recip 2h pam ofacountry with other 1) Fixed Period of Time; It is statement G account pertaining 0.2 period of time, | Fixed Perio’ of Receipts an ~ 1 total receipts and : jg difference 1" actual me ay oe Whenever he“ p unfvousble palance of Payments: eee Ean vestmen' OF as torneetthe diference \ need for necessary adjustmen eye te foreign i" {ul have to take foreign loans oF POM scanned with CamscannerIndi Bsn snes romens ot Bales Of POUMENS ing 0 caoktredeisunlovoabe ba ass anowsovee oe oot deal econ Sindee a sven ett oa ong nt eo ce of Payments rte ag oftdecante netbeans of Balan¢ ant Account, (2)| ofa olpa nd ale err a Cotas, ce ode "meets ‘m, by “Gf WEN oF economic "eta sae pont Sg i poy ea me ee ‘dene (Oe un By eo hector Ste eps of TENET oy hr PH in ee ot tpi Techn = et ep i cs os TE 21 gprs beeen lpm, name, eccounté emploser the! ,'s international trade while nabala ‘pe ecor oupt pert geounts ‘helommeriits comic ett on ee en leet pata made, 180% aprium in Balance of Payments etotnblneed ornate none ever sor SPCC de i account| psncaret eeu sand impars are esa nas nthe a once of payments may be caused. Dismay fn, en entaeced satel on ‘a marr ‘isequlbrium ofthe balonce e, ee nd sometimes on plu up ay aor rgd or SoD ofp side phi plover a an gop he reg cn ea Hee Loose cmang Peay a unter fo fan wansecons main inc 1c or favourable balance of payments: pcan Agi yd ne teal ett ete of hci ea an ees el cps cco nent ad oh i (ll count on hn eda eens cp ae re en ETI ME iy ete Daegu mba dyes mytcna ge = teers AIS a pate dae lynne se aan cy 8 lane of payments a rcacnstaerlromensenceutnayh (fund Ts sun ees och wane (oven Bacto Me as eon er etna nc ae ch a ae pr cen wages PI ime i gen sf veo te _ test Hepat Untavcurable alnee of payments meas thy = P>0 tpn ie ammonite oi as thal Ina’ orsign rade rls, ‘Siktion Foouabl ble of paymeis mean thal nd a le operon go isl an isle impos. Prom se rete neta Babnee Pama cent acout ad apa accu ‘atencot Payments = [Fsprsl Goods + Export of Sences + Captl Resp oot + port of Serves + Capit sie) nen Br= Favourblabelone of payments =P >0= tse gatrhn pace teeneeis positive.) 7 Uawourable Balance of Paymens: Bae of oye nate hens enor tani fecxpts. Thssivaon ices owimecurgres ntconegts Fes nd capil ees are estan porto pisses ler Tcnas eet bales of payments. 1153 Difference between Balance of Trade and Balance of Payments tna (i) Bare pons ia bod te, incaes bolero trode. The te aro concep isa pro bln PEN = ew By = Unavourbl balance of payments RP <0 = esate Been negative) leon blance of paymentsis unfavourable tome! he dftbetnen ise Jo eter males payment in tens of gold ebro om abd fr tut. he yeas thebalancolpamensisaobsinob (2) odes imports and expr of good aloe! vse tes, One the balance of payment inde al kinds of tems, that is imports and exports of goods capil court tanscins. note wor, indie vba oe wees ives. Scanned with CamScannerpumceeomens ion Ren, a ol he county in 258 " 7 a of rupaes, This tur et —onwsta commen 90 iy ont red ea ey caanet M1021 Mec eo et ete 8 a amie senaren oat a ce Te cmt cme FN SBaloee of Posen ret a of Copmtition ae sa Foe er ecb i ut ery Maen me eect sin ns th he ia Nowhere? ipl end ad DoE te Nh Yes Di les fmm Isha gore neon tens ayy Pan (1997-2002) frye the Ha ord ea a Npacict fe 62718 moe 2001-02, balance of py acon sec of Be 37 Pa nt ys of ih ts considered 82 pose shi hess rps a Rs 6,719 O. eee heres ‘the fi of ve Year Pls roa fy be tye on 02 (Te NE oo a Lb sare om Foren Eman: er nc 7S Inthe year 2006-07, balance en es, Tt ithed supe cn en nr SOS te a = te mr Pn ee Seta tt ecb : Or oe rena eT te ten i ie selene peanesenemtamacivem oon ae et a gn iveccnand imine et o7 ea Ml onaumption ae ex ad oe cone er Khas gone v1 187 US dol perten wr elig\ 5857 perl dita gobo ncn ms US872 perbarel. In 1970-1, pelea spe mprtsof petroleum prods fre bs petesperton peeleum prods ihwments of Interest on Foreign Debs: Frio 378s 84,516 crore ti 2007-6. Interest onthe eo. Tis huge interest burden lo caused del rotaed blancs of rade ast an indie en. ie tn Ege: Despite veriousexporromatonshens 0 opr. Moreg#4 growth rate of exports tan tbe goth to i abeugh roth rat in exports wes 28.9 par eat bat ts i Be GS ee ame yar, growth rat of iports was 354 pss (Gt Warsi 1991, Gulf Wor (war between nga snes ‘On the oe hand pe open + ina, detebalecn pment 196051 bance pyran HE ws ep Tecan det geo 24 rer OP soso aw 90S. Wincmel f oceans apa 8 er Frain encnge Te Gl cst of 1990, ld 0 Le eae ol npr i. The eins rom ndion won nt emai ag aed nan arpecadeied ein bance of payments ee Sa cone love eve Foret eserves war ss than even ion Soon entero eet the poymen of esenkal impos the government wes freed Insuions These ian greried lan on the condition that economic reforms in a barat, pvt and balzaon are tobe immediatly implemented. This emergence of pow economic fons. As a silt, ow our overall balance of payments x) Causes of Unfavourable Balance of Payments (Current Acco oofTrade aga 957 ff (Main causes of ug rable belance of payments of Indie are as follows: ce EZ. (aytenportottfachinery:Sioceinéependene, import of machines hasineensd ‘oud tetra nnsn rsa outros Cased he a ‘eprecinion and weeran ea of machines. nore tease the same, large quent Scanned with CamScannerJurdoved AOCAMSE KOhuletey Inrge emount of [08g fy nd fon ods . fie on/p ApPrectation ‘uith U.S. dollar oF we car exch ive impact O Exporters. nyo {y. Dols. Any depreci Us. van rupee. But In Yeor 2008.09,» duction, (i) Backwe industri Pro on eg for adverse balance of peymen. ie in exports, bad effects of high ny + gad eh equality Pool go accout impede suas f demand and suppl 8 Mess seriyminbalance of pavmentsisthe exces, mv of Paym’ fordiseqlt this disequilibr ie resco OTST Ar fo correct this disequilibrium, Ey be broughtdoun. 1) / exe a pont sition shoul a be mos D be encouraged y execs at en Feequiibium inthe balance of payment, ‘goods at lower rates, the demand of imports ‘come down. re ese eed cof exports is the best measure to Restriction on Inessepiia Imports: Another important mad of consctng balance of is restriction on imports” Following measures can be adopted to cut down impor. nees fr the import of esenial goods o Lewying new import du ous goods. vi) Less cred 1 emotion of EPO Ton export goods be withdrawn export ce of set FT ois ot rduced DSS es cefecisat be designed tothe tastes of information technology produets, etc. Raw materai: intemational prices. Production capacity of cement Shenango Be fae ly fs: Goverment of India enters into trade agreements: a expend trade. Many foreign trade delegates vis trade agreements with many counties, vize, Bangladesh, 2 Iraq, etc. On 15 1994, India sis India entered into trade agreements wi eee nto wade agreement with WTO nations spree ned ee te an ; balance of payments cn be cored by increasing eos and aos on several reset promote expr and pope Setting up Special Economie Zones: The special economic zones et up to boost exports, as will be further strengthened. In these zones infrastructure of international quality wil beset Units set up in SEZs will continue to get income tax concessions, exemption from customs and excise Bill was passed by parliament in June 2005. So far 335 SEZs have these 98 SEZs have become fully operational by 30th June, 2008. Crude Oil: As crude of largest item of our imports, so 1d should develop efficient mass transport Scanned with CamScanner263 ta of abl entrepreneurs. Copia goods industries are less in rece cous er stricture ae Insfient. Because of bockward ns ro problem of eX mary Products: Primary prod indian exports mainly conse oducts could not be increased, res these goods is growing, Bangladeshis Korea and China in the export of wlhave ve vipaing the demand of Primary produ fh This has also aves (11) Increase inthe Price of Crude ss esl Fist tec ofeonsumers seme oreo sob calle Ci th rates ar res population grow" 8 ROW ver ince cote Sa ion a soeven row grouth in population i develo ce Level: On account touted igus roducton cn of penscton ar se oO counts ft ncesng I nant developed counties. Asa consequence, price level india ishigh, hence ‘a ol aman ru egos cannot compet international makes (13) Other Problem: eds exported from India are of low quay as compared to goods of Substtu cempetion nit jan goods have marketinafew counties abroad. So there islimited area cons emirgs oped counties are sold worldwide ia does not have wide publity of is products in the international exports does not rie Jr Trade Practices? Sometimesindian exportersindulgein many unfair trade practices do not supply goods strictly according tothe samples shown eater. It shakes the confidence of Importers. {aleo. This as boely effected our e QUESTIONS —— 1, Give on account ofthe main features of India's Foreign Trade since Independence What are the principal changes that have come about inthe ormpostion of I's Forin seat cincr 1951? Whst measures have bean tskenby the Government fo promote empors during recent years? Whats the present dietion and compostion of Foreign Trade of Inia? Buy deeabe the changes In the pate of Inds exprts and imports since independence. al ‘Demand of Consumption Goods: (ered comin de nc heres In ors demand for ino fancie ence our balance of trade has been badly affected. ee Bechet Stet: The industrial stricture of india is weak 2 ton cues ol boca indus structure are lack of <2 Scanned with CamScanner

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