Balance of payments

BALANCE OF PAYMENT.In INDIA

Balance of payments can be simply referred to as the money which flows into and out of the economy.

INDIA CHINA

EXPORTS

IMPORTS

MONEY COMES IN

MONEY GOES OUT

INFLOW OF MONEY ARE CREDITS

OUTFLOW OF MONEY ARE DEBITS

BUYING

PRODUCT COMES IN

SELLING

MONEY COMES IN

WE CAN EXPLAIN IT ON PERSONAL TERMS AS -

IF WE BUY SOMETHING THE PRODUCT COMES TO US BUT OUR MONEY GOES OUT THIS IS A DEBIT TO US.

IF WE SELL THE SAME PRODUCT TO SOME OTHER PERSON THE PRODUCT GOES OUT AND MONEY COMES IN THIS IS A CREDIT TO US.

DEBIT

CREDIT

BALANCE OF PAYMENT

….

THREE MAIN PARTS OF BOP

CURRENT ACCOUNTCAPITAL / FINANCIAL ACCOUNT

OFFICIAL RESERVES

CURRENT ACCOUNT NET EXPORTS - (OVERALL

EXPORTS OF GOODS AND SERVICES) IT COMPRISES OF 80-90% OF CURRENT ACCOUNT.

NET FOREIGN INCOME – IT INCLUDES ALL THE ASSETS OF THE COUNTRY AS WELL AS FOREIGN INVESTMENT AND EARNINGS FROM THE FOREIGN COMPANIES.

FOREIGN AID – IT INCLUDES THE MONEY WHICH A WORKER SENDS TO THEIR HOMELAND.

FINANCIAL ACCOUNT

REAL ASSETS - IT INCLUDES ALL THE TANGIBLE ASSETS OF THE COUNTRY

SUCH AS LAND BUILDING MACHINERY FACTORY ETC.

FINAANCIAL ASSETS – IT INCLUDES ASSETS SUCH AS STOCKS ,

BONDS SHARES ETC.

CURRENT ACCOUNT

FINANCIAL ACCOUNT

BUYING

PRODUCT COMES IN

CURRENT ACCOUNT INCLUDES OF ALL THOSE ASSETS WHO GO TO WHO BOUGHT THEM OR WHO NEEDE THEM.

MONEY GOES OUT

ASSET DOES NOT COME IN

FINANCIAL ACCOUNT INCLUDES THE ASSETS WHICH REMAIN ON THE SAME PLACE WHERE THEY WERE BOUGHT.

INDIA

FACTORY BOUGHTIN CHINA

HOPE YOU GUYS ENJOYED THE SESSION.

THIS WAS AN OVERVIEW OF BALANCE OF PAYMENT IN SHORT.

THANK YOU FOR YOUR

ATTENTION

credits

AAKASH SHARMANEHA BAGUL

ROSHAN KADAYATNIKITA YADAV

POONAM YADAVNEELU JAISWALSHIVAM TIWARI

MAGHA DEVENDRA