Question

What is meant by balance of payments? discuss the salient features of india's balance of payment. what measures would you suggest for improving the india's balance of payment?

Answer 1

BOP is a record of all economic transactions between the residents of the country and the rest of the world in a particular period

Answer 2

Balance of payment refers to a record of all the trade activities visible and invisible that a country is involved in with the rest of the world.

Salient features of India's BoP

1. As a result of high importation levels, India suffers a balance of payment deficit.

2. A high trade deficit leads to increasing current account deficits.

3. High rates of invisible surplus accrued from diaspora remittances

To improve, India's balance of payment, the country can encourage local production hence increase export levels and reduce import levels.