(IGP) Special Current Affairs Material for IAS (Pre) 2013 - Topic: "Balance of Payments (Part -1)"
(IGP) Special Current Affairs Material for IAS (Pre) 2013
Chapter: Government Plans Programme & Policies
Topic: Balance of Payments (Part -1)
Concept Related with this topic
Balance of Payment
Balance of Payments (BoP) statistics systematically summaries the economic transactions of an economy with the rest of the World for a specific period. The Reserve Bank of India (RBI) is responsible for compilation and dissemination of BoP data. BoP is broadly consistent with the guidelines contained in the BoP Manual of the International Monetary Fund.
Balance of payment (BoP) comprises of current account, capital account, errors and omissions and changes in foreign exchange reserves. Under current account of the BoP, transactions are classified into merchandise (exports and imports) and invisibles. Invisible transactions are further classified into three categories, namely (a) Services-travel, transportation, insurance, Government not included elsewhere (GNIE) and miscellaneous (such as, communication, construction, financial, software, news agency, royalties, management and business services); (b) Income; and (c) Transfers (grants, gifts, remittances, etc.) which do not have any quid pro quo.
- 4 Booklets
- In 1250+ Pages
- Will Cover 90 - 95% of Current Affairs and Conceptual Based Questions of IAS (pre.) 2013
- Will Get Online Coaching Special Classes.
- Will Get Printed 3100+ MCQs
- Will Get 5 Comprehensive Test
- These Materials Covered Gist of Editorial & Articles of The Hindu, News of The Hindu, Gist of Press Information Bureau Articles, Gist of India Year Book & Economic Survey, Government Plans Programme & Policies, Important Materials on Environment & Ecology
Capital Account
Under the Capital Account, capital inflows can be classified by instrument (debt or equity) and maturity (short or long term). The main components of the capital account include foreign investment, loans and banking capital. Foreign investment, comprising Foreign Direct Investment (FDI) and Portfolio Investment consisting of Foreign Institutional Investors (FIIs) investment, American Depository Receipts/Global Depository Receipts (ADRs/GDRs) represents non-debt liabilities, while loans (external assistance, external commercial borrowings and trade credit) and banking capital, including non-resident Indian (NRI) deposits are debt liabilities.
Some other Important Terms
Invisibles Travel Credit — This item represents foreign tourist’s expenditure during their stay in India, expenditure incurred by resident travelers abroad and on the debit side it covers exchange sold for private and official travel.
Transportation — Transportation covers receipts and payments on account of international transportation services.
Insurance — Insurance comprises receipts and payments relating to all type of insurance services as well as reinsurance.
Investment Income — Receipts include interest earned on the investments of RBI and on holdings of SDRs, and payments include interest and commitment charges on foreign loans, on purchases from the IMF and those on cumulative allocation of SDRs.
Government not included elsewhere — The item includes receipts and payments on account of maintenance of embassies and diplomatic missions and offices of international institutions as well as receipts and payments on government account not included elsewhere.
Miscellaneous — This item covers, receipts and payments in respect of all other services such as communication services, construction services, software services, technical know-how, royalties etc.
Transfers of payments — (official, private) represent receipts and payments without a quid pro quo. Official transfer receipts represent Contra entries for cash receipts and value of aid received in kind from foreign Governments and institutions and debits cover contributions to international organisations and official grants in cash or kind extended to foreign Government. Private transfer receipts include repatriation of savings, remittances for family maintenance, contributions and donations to religious and charitable institutions and the like.
