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    Bop Crisis

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    varalika
    The document discusses India's balance of payments (BOP) crisis. It defines BOP as a systematic record of all economic transactions between residents of a country and foreign entities. It notes the current account tracks trade balances while the capital account tracks investment flows. A BOP crisis occurs when money is flowing out of a country faster than it can borrow to offset the deficit, such as due to a large budget deficit or debt default. The document then discusses factors, India's past BOP crisis, reforms enacted, and steps that can be taken to prevent future crises.

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    Bop Crisis

    Uploaded by

    varalika
    134 views10 pages
    The document discusses India's balance of payments (BOP) crisis. It defines BOP as a systematic record of all economic transactions between residents of a country and foreign entities. It notes the current account tracks trade balances while the capital account tracks investment flows. A BOP crisis occurs when money is flowing out of a country faster than it can borrow to offset the deficit, such as due to a large budget deficit or debt default. The document then discusses factors, India's past BOP crisis, reforms enacted, and steps that can be taken to prevent future crises.

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    BOP CRISIS meaning and evrything

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    The document discusses India's balance of payments (BOP) crisis. It defines BOP as a systematic record of all economic transactions between residents of a country and foreign entities. It notes the current account tracks trade balances while the capital account tracks investment flows. A BOP crisis occurs when money is flowing out of a country faster than it can borrow to offset the deficit, such as due to a large budget deficit or debt default. The document then discusses factors, India's past BOP crisis, reforms enacted, and steps that can be taken to prevent future crises.

    Copyright:

    © All Rights Reserved
    Download as PPTX, PDF, TXT or read online from Scribd
    Download as pptx, pdf, or txt
    134 views10 pages

    Bop Crisis

    Uploaded by

    varalika
    The document discusses India's balance of payments (BOP) crisis. It defines BOP as a systematic record of all economic transactions between residents of a country and foreign entities. It notes the current account tracks trade balances while the capital account tracks investment flows. A BOP crisis occurs when money is flowing out of a country faster than it can borrow to offset the deficit, such as due to a large budget deficit or debt default. The document then discusses factors, India's past BOP crisis, reforms enacted, and steps that can be taken to prevent future crises.

    Copyright:

    © All Rights Reserved
    Download as PPTX, PDF, TXT or read online from Scribd
    Download as pptx, pdf, or txt
    of 10

    BOP CRISIS

    What is BOP?
    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. It presents
    a classified record of all receipts on account
    of goods exported, services rendered and
    capital received by residents and payments
    made by them on account of goods
    imported and services received and capital
    transferred to non-residents or foreigners.

    Components of BOP:
    1. Current Account :
    . The current account shows you the trade
    position of the country.
    . It shows you the merchandise imports and
    exports, and then the invisibles part of it is also
    trade but its that part of trade where there is
    no physical good exported or imported.
    . In Indias case, the transfers and grants part of
    the invisibles is quite big relative to other
    countries because of the large Indian diasporas.

    2. Capital Account:
    Where current account shows you trade, capital
    account can be thought of as the investments
    part of the international transactions.
    This is further broken out into equity and debt
    investment and the FII money and FDI money is
    part of the equity investments while the
    external commercial borrowings, money
    deposited in banks by NRIs and trade credits
    are debt investments.

    What is BOP CRISIS?


    A BOP crisis, also called acurrency crisis, is:
    asituationinwhichacountryhasdevelopedan
    unsustainablebalance of paymentsdeficit.
    Thatis,abalanceofpayments
    crisisoccurswhensomuchmoneyisflowingoutsidea
    countrythatithasdifficultyborrowingtomakeupthed
    ifference.
    Abalance ofpaymentscrisisbecomesacutein

    circumstanceslikeanexceptionallylargebudgetdefici
    tthatlastsforanextendedperiodoftime
    oradefaultoninterestpaymentsonpublicly-helddebt.

    Factors and Causes

    BOP Crisis in India

    Reforms and Impact

    Steps to be taken:

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