Favorable and Unfavorable Balance of Trade notes-CSEET
Favorable and Unfavorable Balance of Trade:
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 – Favorable and Unfavorable Balance of Trade
Favorable and Unfavorable Balance of Trade notes:
The balance of trade or Net Exports is the difference between the monetary value of exports and imports of output in an economy over a certain periodof time. It is the relationship between a nation’s imports and exports. A favorable balance of trade is known as a trade surplus and consists of exporting more than is imported; an unfavorable balance of trade is known as a trade deficit or, informally, a trade gap.
- Favourable Balance of Trade
When there is an excess of exports over imports, it is called favourable balance of trade. In 1976-77 in India the imports were of value of INR 5073 crore while exports were of value of INR 5142 crore. Thus, balance of trade was +INR 69 crore. Further, it assists in strengthening the economy of a country.
- Unfavourable Balance of Trade
When there is excess of imports over exports, it is called an unfavourable balance of trade. In India in 1982-83 imports were of value INR 14,047 crore while exports were of value of INR 8,637 crore. Balance of trade was INR -5410 crore. Further, it create problems for an economy.
Recent scenario of India’s Balance of Trade
India’s trade deficit narrowed to USD 13.45 billion in August 2019 from USD 17.92 billion in the same month last year and below market expectations of USD 13.60 billion. Merchandise exports fell 6.05 percent to USD 26.13 billion, due mainly to a 12.29 percent slump in sales of gems and jewellery. Meanwhile, major commodity groups posted positive growth: iron ore (356.66 percent); electronic goods (45.89 percent); spices (35.35 percent); marine products (5.28 percent); and mica, coal & other ores, minerals (2.24 percent). Meanwhile, imports tumbled 13.45 percent to USD 39.58 billion as purchases fell for coal, coke & briquettes (-23.75 percent), organic & inorganic chemicals (-14.95 percent), petroleum, crude & products (-8.90 percent), machinery, electrical & non-electrical (-8.80 percent) and electronic goods (-4.12 percent). Considering April-August 2019-20, the trade deficit narrowed to USD 72.85 billion from USD 83.19 billion in the same period of the previous fiscal year. Balance of Trade in India averaged -2645.81 USD Million from 1957 until 2019, reaching an all time high of258.90 USD Million in March of 1977 and a record low of -20210.90 USD Million in October of 2012.