Question

11:39 O. Read Only - You can't save changes to this fi... 3. Why MSME require innovative approach of marketing their products? SECTION.B Case Study (50 Marks) Balance of Payment (DOP) is a statement which records all the monetary transactions made between residents of a country and the rest of the world during any given period. This statement includes all the transactions made by to Individuals, corporates and the government and helps in monitoring the flow of funds to develop the economy. When all the elements are correctly included in the BOP, it should sum up to zero in a perfect scenario. This means the inflows and outflows of funds should balance out. However, this does not ideally happen in most cases, BOP statement of a country indicates whether the country has a surplus or a deficit of funds ie when a country's export is more than its import, its BOP is said to be in surplus. On the other hand, BOP deficit indicates that a country's imports are more than its exports. Tracking the transactions under BOP is something similar to the double entry system of accounting. This means, all the transaction will have a debit entry and a corresponding credit entry A country's BOP is vital for the following reasons: BOP of a country reveals its financial and economic status BOP statement can be used as an indicator to determine whether the country's currency value is appreciating or depreciating BOP statement helps the Government to decide on fiscal and trade policies. It provides important information to analyze and understand the economic dealings of a country with other countries. By studying its BOP statement and its components closely, one would be able to identify trends that may be beneficial or harmful to the economy of the county and thus, then take appropriate measures Case Questions: 6. Why Balance of Payment is vital for India? Discuss by illustrating the current position of India's Balance of Payment? or 7. How, Balance of Payment (BOP) statement can be used as an indicator to determine whether the country's currency value is appreciating or depreciating? Discuss by citing examples in Indian Context. 8. BOP statement helps the Government to decide on fiscal and trade policies. Discuss with suitable examples 9. What are four important accounts of Balance of Payment (BOP)? Why, it should sum up to zero in a perfect scenario? 10. When high level of Current Account Deficit is not good for Economy Discuss with examples HI O

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MSME's w less labor. in migrant are vulnerable because : mechanised – high dependency con human labor in absence of work migrated back to home security. supply chain disrupted as essential raw cil No social (iv) MSMEs material unavailable " No demand for products in lockdown revenue fall mostly. o come back. Cleaning . i financing seepbost 'no-interest' loan •Procurning from MSME directly for govt office requirement. For ex: chals, tables etc. Tax relief to till noumalcy their pending to payments. Provide Schart of MSME workforce wage. MSME are defined on the basis of investment in and plant & machinery which lacked precise detail of investment. For ex: how much lowestment on what factors (machines, automation, technology, etc) L a part 44 رند will eliminate unneccessary dommentation requirement i Help in identifying MSME's who are benefivery of govt scheme / bank loan. Digitibization also increase market access. for ex : Gor from GeM portal procure MSME U A

nge Rates I with loan from del to ex eary policy ction 18 18.58, the Cive Digitilization bank on Excha products. also helped in getting the basis of digital ital transaction 11 crore people. It will en inclusive inclusive growth * (vi) The pro transaction & logistices cost will reduce. encourage & It employe ats are The e right point er and ciates he nan ve sh en de as at here MSME are ant unt small forme, so & innovative approach like highlighting G I g & they cannot spend much on advertising. Use of web portals like Gem increase their access to area will attract more consumer. can market Given the nearly 450 million internet users, developing app for its product can help targetting their consumer * Dernonstrating expertise & variety of product can help them to compete with big firms. For ex: Advertisement on google, & It can in it shows help finding financial Reconomic status of India * India has deficit with China, USA , et high dependency on imports. *Need to increase domestic production. * Current Bop - US $ 14.3 Billion (as on 0,92011-2) & Hower current afc deficit is decreasing year basis showing high receipts recent US $314 on Billion

7 of Bop is deficit ( import Yexport) o nodig Surfles (export >import) So, when Bop is defruit currency will depreciate of $ will demand for increand imports. The & will decrease so, Idepreciate more value of Z in teanus of If Bop is surplus, supee will appreciate Bop of (Aprix sep) 2017-18 -21.9 (deficit) 2081426416 - 35.0 (deficit) 268 & 14 billion 2018 - 19 billion

Jea measures inflow & out flow a. The main accounts of Bop are: (a, wount account : It of goods & services into the country, also includes earning of investment obrol 16 Capital Account : Here all international capital transfers funds received, gifts & etc on ou are recorded. For ex: pa

ve l-er i financial account. It includes international monetary flows related to investment in business bonds , et. Also include gout assets like real estate SDR's, FDI, etc. of All the transaction sum BOP must be zero. The reason is that in woront credit appearing every account has a debit in capital account & vice-vers If a country exports an item, it can import foreign capital when the item is paid. of country import is not funded by exports of capital. The reserves stant decreasing