Balance of Payment Crisis in India– What the Figures Say: a research study

Abstract

The Balance of Payment position of India has been making headline news regularly in the recent past. There has been a large scale criticism of the general handling of the economic policies of the country and more specifically the halt in the advancement of the reform process. It is in this back drop that we felt that it would be relevant to see the issue from a historical perspective. This study therefore traced the Balance of Payment position from 1951 with regard to some variables like exports, imports, current account deficit etc. We have also studied the contents of Balance of Payment under the various heads of account like Current account and Capital Account between the periods 2001 to 2012 in detail. Further we have endeavoured to investigate whether a relationship exists between some of the variables in the Balance of Payments like the flow of FDI and FPI, Private transfers and Bank’s external liabilities and between Capital and current account inflows.