One of the important goals of the economic liberalization policy is to achieve high convertibility of the Indian rupee. Which of the following is not a benefit of rupee convertibility?
Capital Account Convertibility of ₹: · Freedom to convert local financial assets into foreign ones at market-determined exchange rates · Leads to free exchange of currency at lower rates and an unrestricted mobility of capital · Beneficial for a country because inflow of foreign investment increases · The flip side, though, is that it could destabilize an economy due to massive capital flows in and out of the country Capital account refers to expenditures and investments in hard assets, physical premises, and factories as well as investments in land and other capital-intensive items. Current account refers to investments that are short term in duration and hence, they fall under the current account head India has full current account convertibility but partial capital account convertibility as on 2019. India has partial convertibility (40:60) in the capital account, but inside this overall policy, enough reforms have been made, and to certain levels of foreign exchange requirements. Pros and cons of Capital account Convertibility: Advantages Disadvantages
Availability of large funds by improved access to international financial markets. Market determined exchange rates being higher than officially fixed exchange rates can raise import prices and cause Cost-push inflation. Reduction in cost of capital. Improper management of CAC can lead to currency depreciation and affect trade and capital flows. The incentive for Indians to acquire and hold international securities and assets. The advantages have been found to be short lived as per studies, and also International financial institutions are skeptical about CAC post-2008 crisis. Greater financial competitiveness. Speculative activity can lead to capital flight from the country as in case of some South East Asian economies during 1997-98. Will help Indian corporate to use External commercial borrowing route without RBI or Govt approval. Imposing control would become difficult in a globalized environment once CAC is introduced. Indian residents can hold and transact foreign currency denominated deposits with Indian banks. A Certain class of financial institutions and later NBFCs can access global financial market. Banks and financial institutions can trade in Gold globally and issue loans.
Which report will be submitted by an auditor, if he is dissatisfied regarding the facts and information?
A company registered under section 8 of the Companies Act shall not alter the provisions of its memorandum or articles except with the previous approva...
The capital asset pricing model (CAPM) suggest that, the cost of equity is a trade-off between :
Under which section of the Income Tax Act, 1961, can an individual claim a deduction for the payment of Medical/Health Insurance Premium?
Debt financing is sometimes preferred by the corporate due to the fact that:
How much percentage of salary is allowed for exemption in House rent allowance Section 10(13A) in case of metro city?
If the PV ratio us 80% and MOS is 20000. Calculate FC if SP per unit is 5 and Contribution is 40000.
Journal entry is not made for which of the following?
Which section of the Income Tax Act, 1961, defines the term ‘Assessee’?
The value of supply should include: