Balance of payment OF INDIA
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The document discusses India's balance of payments (BOP) trends from 2019-2020. It provides definitions of key BOP terms like current account, capital account and reserve account. The current account records exports/imports of goods/services plus income and transfers. The capital account records cross-border investments and loans. The reserve account tracks changes in foreign exchange reserves and IMF holdings. In 2019-2020, India saw an improved BOP position due to higher FDI, portfolio flows and external borrowings. However, declining exports and non-oil, non-gold imports posed risks. The COVID-19 pandemic severely impacted the economy in Q1 2020 but recovery has been faster than expected since then, though still slower than
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This document provides an overview of balance of payments (BOP) accounting. It defines BOP as a systematic record of all economic transactions between a country and the rest of the world. It notes that BOP has three main components: the current account balance, capital account balance, and the overall BOP. The current account tracks goods/services exports and imports, while the capital account tracks financial flows. The document also discusses factors that can cause BOP disequilibriums and monetary/non-monetary policy tools to correct imbalances, such as devaluation, export promotion, and tariffs.
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1.Balance of Payment
The balance of payment of a country is a systematic accounting record of all economic transactions during a given period of time between the residents of the country and residents of foreign countries.
2.Componets of BOP
Current Account
It includes imports and exports of goods and services and unilateral transfer of goods and services.
Capital Account
Under this are grouped transactions leading to changes in foreign assets and liabilities of the country.
3. Accounting Treatment of Items (Debit and Credit Items)
Any item which gives rise to a sale of foreign exchange (an inflow) is recorded as a credit item (+) in the accounts e.g. export of goods and services
Any item which gives rise to the purchase of foreign exchange (an outflow) is recorded as a debit item (-) in the accounts e.g imports of goods and services.
4. BOP Disequilibrium
BOP is a double entry accounting record, then apart from errors and omissions, it must always balance.
The BOP deficit or surplus indicate imbalance in the BOP.
This imbalance is interpreted as BOP Disequilibrium.
A country’s balance of payments is said to be in disequilibrium when its autonomous receipts (credits) are not equal to its autonomous payments (debits).
5.BOP Deficit
A deficit or an unfavorable balance exists when the value of autonomous debit items exceeds the value of autonomous credit items.
6. BOP Surplus
A surplus or a favourable balance exists when the value of autonomous credit items exceeds the value of autonomous debit items.
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This document provides an overview of balance of payments (BOP) accounting. It defines BOP as a systematic record of all economic transactions between a country and the rest of the world. It notes that BOP has three main components: the current account balance, capital account balance, and the overall BOP. The current account tracks goods/services exports and imports, while the capital account tracks financial flows. The document also discusses factors that can cause BOP disequilibriums and monetary/non-monetary policy tools to correct imbalances, such as devaluation, export promotion, and tariffs.
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The document discusses India's balance of payments from pre-1991 to post-reform periods. It notes that pre-1991 saw persistent balance of payments deficits due to large-scale machinery imports to develop basic industries and rising oil prices. 1976-80 was a brief surplus period due to worker remittances and export growth. 1980-91 saw severe deficits exceeding $16 billion by 1991. Post-1991 reforms led to surpluses due to invisibles earnings, external borrowings, and foreign investment.
Balance of Payment Disequilibrium and Causes
1.Balance of Payment
The balance of payment of a country is a systematic accounting record of all economic transactions during a given period of time between the residents of the country and residents of foreign countries.
2.Componets of BOP
Current Account
It includes imports and exports of goods and services and unilateral transfer of goods and services.
Capital Account
Under this are grouped transactions leading to changes in foreign assets and liabilities of the country.
3. Accounting Treatment of Items (Debit and Credit Items)
Any item which gives rise to a sale of foreign exchange (an inflow) is recorded as a credit item (+) in the accounts e.g. export of goods and services
Any item which gives rise to the purchase of foreign exchange (an outflow) is recorded as a debit item (-) in the accounts e.g imports of goods and services.
4. BOP Disequilibrium
BOP is a double entry accounting record, then apart from errors and omissions, it must always balance.
The BOP deficit or surplus indicate imbalance in the BOP.
This imbalance is interpreted as BOP Disequilibrium.
A country’s balance of payments is said to be in disequilibrium when its autonomous receipts (credits) are not equal to its autonomous payments (debits).
5.BOP Deficit
A deficit or an unfavorable balance exists when the value of autonomous debit items exceeds the value of autonomous credit items.
6. BOP Surplus
A surplus or a favourable balance exists when the value of autonomous credit items exceeds the value of autonomous debit items.
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Foreign portfolio investment (FPI) refers to passive investments made by foreign investors in securities and other financial assets in India. FPI does not provide direct ownership or management control over companies. India opened up to FPI in 1992 and since then it has been a major source of private capital inflows. Factors that attract FPI include a strong performing stock market, economic growth, and currency appreciation, while factors that discourage it include high exchange rate volatility, poor domestic growth, and higher interest rates abroad. Foreign investors must meet eligibility criteria to invest as a registered FPI and are subject to individual and aggregate investment limits and guidelines. FPI can invest in equities, debt, derivatives and participate in corporate actions according to SEBI
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3. The current account records trade in goods and services as well as unilateral transfers, while the capital account records changes in financial assets and liabilities with the rest of the world.
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India's foreign trade has grown substantially over the years. The document discusses key trends in India's exports and imports between 2004-2014. It notes that India's top export partners are the USA, UAE, and Saudi Arabia, with petroleum products, pearls/precious stones, and gold being the top exported commodities. For imports, China is the top source country, followed by Saudi Arabia and UAE, with crude petroleum, gold, and other commodities being the leading imports. The composition and direction of India's trade has changed significantly since the 1990s liberalization, with growing exports of manufactured goods and imports of capital goods and industrial materials.
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please like the presentation and comment below your views about it.
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The document provides an overview of Kuwait's balance of payments and economic indicators. It notes that Kuwait has a vast amount of oil reserves that account for around half of its GDP, 95% of export revenues, and 80% of government revenues. The country's current account has grown significantly from 2004 to 2011 due to increasing oil exports, and it has a consistent positive balance in its current and capital accounts, but a negative balance in its financial account due to more outgoing foreign direct investment. Key economic indicators for Kuwait such as GDP, inflation, exports, and imports are also presented.
Balance of payment
This document discusses India's balance of payments. It begins by defining the balance of payments as a systematic record of all economic transactions between residents of a country and the rest of the world. It then explains the importance of the balance of payments for understanding currency demand and supply, exchange rates, and monetary policy shifts. The document outlines the key components of a balance of payments statement, including the current account, capital account, and errors and omissions. It also discusses accounting treatments for balance of payments surpluses and deficits and the effects of disequilibriums on the economy. In less than 3 sentences.
18454170 balance-of-payment
The document discusses India's balance of payments (BOP). It explains that BOP records all transactions between Indian residents and foreign residents. It consists of the current account, capital account, and official international reserves account. The current account includes exports and imports of goods and services. The capital account includes foreign investment, banking capital, and external borrowings. India saw a widening trade deficit and moderation in capital flows in the first half of 2008-09, though inward remittances remained strong. Exports declined in late 2008 while imports grew, leading to higher trade deficits. Foreign exchange reserves declined in line with falling capital inflows.
Balance of Payment
The document summarizes India's balance of payments (BOP) over several years. It finds that:
1. India's trade balance has consistently been in deficit as imports have exceeded exports. Imports of petroleum products in particular have increased steadily.
2. The current account, which includes both visible and invisible items, recorded deficits from 1990-2001 but surpluses in 2003-2004 and 2005-2006. Invisibles like services and remittances have helped cover trade deficits.
3. Capital account has remained positive due to large inflows of foreign direct investment, foreign institutional investment, and deposits from non-resident Indians. Foreign exchange reserves have fluctuated depending on current and capital accounts.
Balance of payments
The balance of payments accounts record all monetary transactions between a country and the rest of the world, including payments for exports and imports of goods and services, as well as financial capital transfers. It has three main components: the current account balance, which covers trade in physical and services goods; the capital account balance, which covers financial transactions; and the overall balance of payments. A deficit can occur in any of these accounts due to economic, political, social, and other factors that impact trade and capital flows.
Balance of payments
The Balance of Payments is a statement that summarizes all payments and receipts by residents of a country with the rest of the world over a period of time. It has two main components - the current account, which records transactions of goods, services and investment income, and the capital account, which records capital transactions such as loans and investments. A country usually runs a current account deficit as it imports capital goods for development, which is financed by a capital account surplus through borrowing or lending abroad. India's balance of payments has seen deficits that were addressed through import restrictions and export promotions over different plan periods.
Balance of payment
The document discusses the balance of payments and balance of trade. It defines balance of payments as the record of all monetary transactions between a country and other countries, including capital flows, exports, imports and other payments. It has three components - current account, capital account and financial account. The current account covers short-term transactions while the capital account covers long-term international capital flows. Balance of trade is the difference between a country's exports and imports of goods, and is a component of the current account. It can be in surplus, deficit or balanced. The balance of payments provides a more complete picture of a country's economic status than just the balance of trade.
India's Current Account Deficit- A report
A report on india's current account deficit.
compiled by: Gurpreet Singh, Neha Diwakar, Udbhav mehta and Shweta Dixit.
Balance of payment and exchange rate
The document summarizes the key aspects of a country's balance of payments (BOP), including:
1) The BOP records all economic transactions between a country's residents and the rest of the world in a given period, usually one year. It has both a current account and a capital/financial account.
2) A BOP deficit can put pressure on a country's exchange rate and signals the need for corrective measures.
3) Measures to correct a deficit include reducing imports through monetary steps like devaluation or non-monetary steps like tariffs and quotas.
Balance of payments (2)
The document discusses India's balance of payments (BOP) and key developments in the first quarter of 2010-11. It defines BOP as recording all transactions between Indian residents and foreign residents, including exports/imports and financial capital flows. India's BOP consists of the current account, capital account, and official reserves account. In Q1 2010-11, India's merchandise exports and imports grew significantly year-over-year, though the trade deficit was higher. Services exports grew strongly, but the lower surplus and higher deficit resulted in a higher current account deficit. Gross capital inflows and outflows both increased from the previous year. Overall, India's BOP was in surplus due to higher net capital flows offsetting the
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Balance of payment OF INDIA
- 2. Understanding BOP Kindle Berger "The balance of payments of a country is a systematic record of all economic transactions between the residents of the reporting country and residents of foreign countries during a given period of time". The balance of payments (BOP), also known as balance of international payments, summarizes all transactions that a country's individuals, companies, and government bodies complete with individuals, companies, and government bodies outside the country. “The balance of payments of a country is a systematic record of all economic transactions between the residents of a country and the rest of the world. Reserve Bank Of India
- 3. Features Of BOP Systematic record of all economic transactions Includes all transactions Relates to a period of time Has a double-entry book-keeping system
- 4. Importance Of BOP Examine the transaction Helps the government to analyse Detects the state of the economy Judge economic and financial status of a country in the short-term Confirms trends in the economy's international trade and exchange rate of the currency
- 5. If a transaction earns foreign currency for the nation, it is a credit and is recorded as a plus item. RULE 1 VISIBLE ITEMS CAPITAL TRANSFER If a transaction involves spending of foreign currency it is a debit and is recorded as a negative item RULE 2 INVISIBLE ITEMS
- 6. The current account measures a country's trade balance plus the effects of net income and direct payments. When the activities of a country's people provide enough income and savings to fund all their purchases, business activity, and government infrastructure spending, then the current account is in balance. 01 02 03 Merchandise Balance Services Balance Unilateral Transfer Balance Current Account includes 3 balances namely: 1. 2. 3. Real transactions deal with the actual transfer even of goods and services that affect the national income, output and expenditure of the country. Current Account consists of real and short term transactions. It contains receipts and payments on account of exports of all types of visible and invisible items along with unilateral transfers. CURRENT ACCOUNT
- 7. The capital account measures financial transactions that don't affect a country's income, production, or savings. For example: it records international transfers of drilling rights, trademarks, and copyrights. 01 Many capital account transactions rarely happen, such as cross-border insurance payments. The capital account is the smallest component of the balance of payments 02 03 Capital account consists of its transactions in financial assets in the form of short-term lending and borrowings and private and official investments. It refers to the inflow and outflow of capital, an account of capital transactions like loans and investments, inflow and outflow of foreign capital, repayment of past debts, interest payment on foreign debts etc. CAPITAL ACCOUNT
- 8. It is a part of a capital account. It measures the changes in a nation’s liquid and non-liquid liabilities to foreign official holders and the change in a nation’s official reserve assets during the year. 01 02 The IMF account contains purchases (credits) and repurchase (debits) from the International Monetary Fund. Special Drawing Rights (SDRs) can be used to settle international payments between monetary authorities of two different countries. Three accounts: IMF, SDR, & Reserve and Monetary Gold (collectively called as The Reserve Account) It includes its gold stock, changes in the official foreign exchange holdings, SDR holdings of the government and similar other capital transactions. etc. are some of the other items of credit and payments are the debit items. RESERVE ACCOUNT
- 9. Now, let's analyse the recent trends in the BOP of India
- 10. INDIA'S BOP DURING THE YEAR 2019- 2020 (Q1)
- 11. INDIA'S BOP DURING THE YEAR 2019-2020 (Q2) APRIL - SEPTEMBER : H1
- 12. INDIA'S BOP DURING THE YEAR 2019-2020 (Q3)
- 13. INDIA'S BOP DURING THE YEAR 2019-2020 (Q4)
- 14. INDIA'S BOP DURING THE YEAR 2020-2021 (Q1)
- 15. INDIA'S BOP DURING THE YEAR 2020-2021 (Q2) APRIL - SEPTEMBER : H1
- 16. Let's have a look at how this COVID -19 pandemic has changed the scenario of BOP in India
- 18. What can be the possible solutions? !
- 19. Exchange Depreciation (Price Effect) 01 02 03 04 05 Monetary Policy (Deflection) Devaluation Fiscal Policy ( Import Duties) Improving Export
- 20. Conclusion India’s balance of payments (BoP) in the first half of 2019-20 has improved on the back of higher Foreign Direct Investment (FDI), portfolio flows and external commercial borrowings and a narrowing current account deficit (CAD); but dwindling exports and a decline in non-POL (petroleum, oil, lubricants), non-gold imports as a proportion of GDP spells possible trouble. The Economic Survey 2019-20 expressed satisfaction that India’s external sector has gained further stability in the first half of 2019-20, with an improvement in Balance of Payments (BoP) position, anchored by capital flows through FDI, FPI and ECBs; receipt of robust remittances and contraction of CAD. While 2020 saw India economy facing a sharp blow in the April-June quarter, the Indian economy is certainly recovering at a faster pace. Most high-frequency indicators are looking positive although at a slightly slower pace than in recent months and easy financial conditions, unlocking of the economy and recent Government measures are likely to lead to better 2021.
- 21. Thank You! OPEN FOR FEEDBACK
- 22. Ayesha Ahmed Soumya Singh Kavita Mishra Akshat Sharma Sujay Sharma Pradeep Kumar Sriyansh Srivastava Submitted By: