Balance of Payments and it’s major components notes-CSEET
Balance of Payments and it’s major components:
ICSI CSEET: The Council of the ICSI has released a notice regarding CSEET on the day of the inauguration of ICSI Golden Jubilee Celebrations on 4th Oct 2017.
The Gazette Notification on the Company Secretaries (Amendment) Regulations, 2020 has been published on 3rd February 2020 in the Official Gazette of India and the same shall be applicable from the said date of publication.
Now ICSI Published a notice regarding CSEET Test which going to start from 2020 May.
We are now going to discuss the details of CSEET Paper-3 Economics and Business Environment notes – Balance of Payments and it’s major components
Balance of Payments and it’s major components notes:
The balance of payments (BOP) is the method countries use to monitor all international monetary transactions at a specific period. Usually, the BOP is calculated every quarter and every calendar year. All trades conducted by both the private and public sectors are accounted for in the BOP to determine how much money is going in and out of a country. If a country has received money, this is known as a credit, and if a country has paid or given money, the transaction is counted as a debit.
Theoretically, the BOP should be zero, meaning that assets (credits) and liabilities (debits) should balance, but in practice, this is rarely the case. Thus, the BOP can tell the observer if a country has a deficit or a surplus and from which part of the economy the discrepancies are stemming. A country’s trade balance equals the value of its exports minus its imports.
The formula is X – M = TB, where:
X = Exports
M = Imports
TB = Trade Balance
With reference to India, the components of Balance of Payments (BOP) are as under:
Major Items of India’s Balance of Payments
- Current Account
- Primary Income
- Secondary Income
- Capital Account and Financial Account
Change in Reserves (Increase (-)/Decrease (+))
- Errors & Omissions (-) (A+B)
P: Preliminary; PR: Partially Revised
Source : RBI