BALANCE OF

PAYMENT/भुगतान का
संतुलन
UNIT 2
 INTRODUCTION
 The balance of payment is the statement that files
all the transactions between the entities,
government anatomies, or individuals of one
country to another for a given period of time. All
the transaction details are mentioned in the
statement, giving the authority a clear vision of the
flow of funds.
 After all, if the items are included in the statement,
then the inflow and the outflow of the fund should
match. For a country, the balance of payment
specifies whether the country has an excess or
shortage of funds. It gives an indication of whether
the country’s export is more than its import or vice
versa.
 परिचय
भुगतान संतुलन वह विवरण है जो एक निश्चित अवधि के लिए एक देश की
संस्थाओं, सरकारी निकायों या व्यक्तियों के बीच सभी लेनदेन को रिकॉर्ड
करता है। विवरण में सभी लेनदेन विवरण का उल्लेख किया गया है, जिससे
प्राधिकरण को धन के प्रवाह की स्पष्ट दृष्टि मिलती है।
आख़िरकार, यदि आइटम विवरण में शामिल हैं, तो फं ड का प्रवाह और बहिर्वाह
मेल खाना चाहिए। किसी देश के लिए, भुगतान संतुलन निर्दिष्ट करता है कि
देश में धन की अधिकता है या कमी। यह इस बात का संके त देता है कि देश
का निर्यात उसके आयात से अधिक है या इसके विपरीत।
 MEANING
 Balance Of Payment (BOP) is a statement that
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 be 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.
 अर्थ
भुगतान संतुलन (बीओपी) एक ऐसा विवरण है जो किसी निश्चित अवधि के
दौरान किसी देश के निवासियों और शेष विश्व के बीच किए गए सभी मौद्रिक
लेनदेन को रिकॉर्ड करता है। इस विवरण में व्यक्तियों, कॉरपोरेट्स और
सरकार द्वारा/से किए गए सभी लेनदेन शामिल हैं और अर्थव्यवस्था को
विकसित करने के लिए धन के प्रवाह की निगरानी में मदद मिलती है।
जब सभी तत्वों को बीओपी में सही ढंग से शामिल किया जाता है, तो एक आदर्श
परिदृश्य में यह शून्य होना चाहिए। इसका मतलब है कि धन का प्रवाह और
बहिर्वाह संतुलित होना चाहिए। हालाँकि, ज्यादातर मामलों में ऐसा आदर्श रूप
से नहीं होता है।
 A BOP statement of a country indicates
whether the country has a surplus or a
deficit of funds, i.e. when a country’s export
is more than its import, its BOP is said to be
in surplus. On the other hand, the BOP
deficit indicates that its imports are more
than its exports.
 Tracking the transactions under BOP is
similar to the double-entry accounting
system. All transactions will have a debit
entry and a corresponding credit entry.
 किसी देश का बीओपी विवरण इंगित करता है कि देश के पास अधिशेष है या
धन की कमी है, अर्थात जब किसी देश का निर्यात उसके आयात से अधिक
होता है, तो उसका बीओपी अधिशेष में कहा जाता है। दूसरी ओर, बीओपी
घाटा यह दर्शाता है कि इसका आयात इसके निर्यात से अधिक है।
 बीओपी के तहत लेनदेन को ट्रैक करना डबल-एंट्री अकाउंटिंग सिस्टम के
समान है। सभी लेनदेन में एक डेबिट प्रविष्टि और संबंधित क्रे डिट प्रविष्टि होगी।
 EXAMPLE/उदाहरण
Funds entering a country from a foreign source are
booked as credit and recorded in the BOP.
Outflows from a country are recorded as debits
in the BOP. Let’s say Japan exports 100 cars to
the U.S. Japan books the export of the 100 cars
as a debit in the BOP, while the U.S. books the
imports as a credit in the BOP.
किसी विदेशी स्रोत से किसी देश में प्रवेश करने वाले फं ड को क्रे डिट के रूप में बुक किया
जाता है और बीओपी में दर्ज किया जाता है। किसी देश से होने वाले बहिर्प्रवाह को
बीओपी में डेबिट के रूप में दर्ज किया जाता है। मान लीजिए कि जापान अमेरिका को
100 कारों का निर्यात करता है। जापान 100 कारों के निर्यात को बीओपी में डेबिट
के रूप में दर्ज करता है, जबकि अमेरिका आयात को बीओपी में क्रे डिट के रूप में
दर्ज करता है।
 FORMULA FOR BOP
CURRENT
ACCOUNT

CAPITAL
ACCOUNT

FINANCIAL
ACCOUNT
0
BALANCING
ITEM
 WHY IS THE BALANCE OF PAYMENT (BOP) VITAL
FOR A COUNTRY?

A country’s BOP is vital for the following reasons:

1. The BOP of a country reveals its financial and

economic status.

2.A BOP statement can be used to determine whether the

country’s currency value is appreciating or depreciating.

3. The BOP statement helps the government to decide on

fiscal and trade policies.

4. It provides important information to analyse and

understand the economic dealings with other countries.
किसी देश के लिए भुगतान संतुलन (बीओपी) क्यों
महत्वपूर्ण है?
किसी देश की बीओपी निम्नलिखित कारणों से महत्वपूर्ण है:
1. किसी देश की बीओपी से उसकी वित्तीय और आर्थिक स्थिति का पता
चलता है।
2.बीओपी स्टेटमेंट का उपयोग यह निर्धारित करने के लिए किया जा सकता है
कि देश की मुद्रा का मूल्य बढ़ रहा है या घट रहा है।
3. बीओपी विवरण सरकार को राजकोषीय और व्यापार नीतियों पर निर्णय
लेने में मदद करता है। 4. यह अन्य देशों के साथ आर्थिक व्यवहार का
विश्लेषण और समझने के लिए महत्वपूर्ण जानकारी प्रदान करता है।
1.CURRENT ACCOUNT/चालू खाता
 The current account monitors the inflow and
outflow of goods and services between
countries. This account covers all the
receipts and payments made with respect to
raw materials and manufactured goods.

 It also includes receipts from engineering,

tourism, transportation, business services,
stocks, and royalties from patents and
copyrights. When all the goods and services
are combined, they make up a country’s
Balance Of Trade (BOT).
 The four components are:

1. Balance of trade in goods. Tangible items are recorded here.

2. Balance of trade in services. Intangible items like tourism are

recorded here.

3. Net income flows (primary income flows). Wages and

investment income are examples of what would be included in
this section.

4. Net current account transfers (secondary income flows).

Government transfers to the United Nations (UN) or European
Union (EU) would be recorded here.
2. CAPITAL ACCOUNT/ पूंजी खाता

 All capital transactions between the countries are monitored

through the capital account. Capital transactions include
purchasing and selling assets like land and properties.

 The capital account also includes the flow of taxes, purchase and
sale of fixed assets etc., by migrants moving out/into a different
country. The deficit or surplus in the current account is managed
through the finance from the capital account . There are three
major elements of a capital account:

1. Loans and borrowings – It includes all types of loans from the

private and public sectors located in foreign countries.
2. Investments – These are funds invested in corporate stocks by non-
residents.
3. Foreign exchange reserves – Foreign exchange reserves held by
the country’s central bank to monitor and control the exchange
rate do impact the capital account.
 3. FINANCIAL ACCOUNT/ वित्तीय
खाता
 The flow of funds from and to foreign countries through
various investments in real estate, business ventures, foreign
direct investments etc., is monitored through the financial
account. This account measures the changes in the foreign
ownership of domestic assets and domestic ownership of
foreign assets. Analysing these changes can be understood if
the country is selling or acquiring more assets (like gold,
stocks, equity, etc.).

 The financial account is split into three main parts:

1.Direct investment. This records the net investments from
abroad.
2.Portfolio investment. This records financial flows such as the
purchasing of bonds.
3.Other investments. This records other financial investments
such as loans.
 FEATURES OF BOP
(i) It is a systematic record of all economic transactions
between residents of one country and rest of the
world.

(ii) It includes all transactions in goods (visible items),

services (invisible) and assets (flow of capital)
during a period of time.

(iii) It is constructed on double entry system of

accounting. Thus, every international transaction will
result in credit entry and debit entry of equal size.

(iv) All economic transactions that are carried out with

the rest of world are either credited or debited.
 बीओपी की विशेषताएं
(i) यह एक देश और शेष विश्व के निवासियों के बीच सभी आर्थिक लेनदेन का एक
व्यवस्थित रिकॉर्ड है।

(ii) इसमें एक समयावधि के दौरान वस्तुओं (दृश्य वस्तुएं), सेवाओं (अदृश्य) और

परिसंपत्तियों (पूंजी का प्रवाह) के सभी लेनदेन शामिल हैं।

(iii) इसका निर्माण लेखांकन की दोहरी प्रविष्टि प्रणाली पर किया गया है। इस प्रकार,
प्रत्येक अंतर्राष्ट्रीय लेनदेन के परिणामस्वरूप समान आकार की क्रे डिट प्रविष्टि और
डेबिट प्रविष्टि होगी।

(iv) शेष विश्व के साथ किए जाने वाले सभी आर्थिक लेनदेन या तो क्रे डिट किए जाते
हैं या डेबिट किए जाते हैं।
 IMPORTANCE OF BOP
1. It examines all of a country's exports and
imports of goods and services over a specific
time period.
2. It assists the government in determining the
potential for export growth in a specific
industry and developing policies to encourage
such growth.
3. It gives the government a comprehensive
picture of various import and export levies. The
government then takes steps to raise and lower
taxes in order to discourage imports while
increasing exports and achieving self-
sufficiency.
 बीओपी का महत्व
यह एक विशिष्ट समय अवधि में किसी देश के सभी वस्तुओं और सेवाओं के
निर्यात और आयात की जांच करता है।
यह किसी विशिष्ट उद्योग में निर्यात वृद्धि की संभावना निर्धारित करने और ऐसी
वृद्धि को प्रोत्साहित करने के लिए नीतियां विकसित करने में सरकार की
सहायता करता है।
यह सरकार को विभिन्न आयात और निर्यात शुल्कों की एक व्यापक तस्वीर देता है।
इसके बाद सरकार निर्यात बढ़ाने और आत्मनिर्भरता हासिल करने के साथ-
साथ आयात को हतोत्साहित करने के लिए करों को बढ़ाने और कम करने के
लिए कदम उठाती है।
 SURPLUS/DEFICIT
आधिक्य/घाटा
 If the total of the current and capital accounts is
a positive number i.e., greater than 0, then it
indicates a BoP Surplus. If the total of the
current and capital accounts is a negative
number, i.e., smaller than 0, then it indicates a
BoP Deficit.
 यदि चालू और पूंजी खातों का कु ल एक सकारात्मक संख्या है यानी 0 से
अधिक है, तो यह बीओपी अधिशेष को इंगित करता है। यदि चालू और पूंजी
खातों का कु ल एक नकारात्मक संख्या है, यानी 0 से कम है, तो यह बीओपी
घाटे को इंगित करता है।
 WHAT IS SURPLUS?
अधिशेष क्या है?
When there is more of a good or service
available than has been consumed, we say that
there is a surplus. The term is commonly used
to describe the situation that occurs when the
supply of a good or service exceeds the
demand for it. Surplus assets include things
like capital, income, profits, and products.
जब कोई वस्तु या सेवा उपभोग की तुलना में अधिक उपलब्ध होती है, तो हम कहते
हैं कि अधिशेष है। इस शब्द का प्रयोग आमतौर पर उस स्थिति का वर्णन करने के
लिए किया जाता है जो तब होती है जब किसी वस्तु या सेवा की आपूर्ति उसकी
मांग से अधिक हो जाती है। अधिशेष संपत्तियों में पूंजी, आय, मुनाफा और
उत्पाद जैसी चीजें शामिल हैं।
There are many different kinds of excess,
including the following −
 Economic surplus − This term is used to describe a rise in the
amount of money that may be made by selling a certain commodity. It
might be an output surplus or an income surplus. One or the other
might happen. In a situation of consumer surplus, the price of a thing
or service is less than the highest feasible price the client is ready to
pay for that item. The end outcome is better for the consumer. When
there is a surplus of production over demand, however, producers
might earn a profit by charging more than the going rate for their
wares.
 Budget surplus − This frequently occurs in governmental
organizations and occurs when income is greater than the amount
spent.
 WHAT IS DEFICIT?
घाटा क्या है?
The term "deficit" is used to describe a situation in
which there is not enough of a required
resource, most commonly money, resulting in
higher expenses than income. Signs of wasteful
spending include a negative cash flow (when
expenditures exceed revenues) and a growing
debt load
"घाटा" शब्द का प्रयोग ऐसी स्थिति का वर्णन करने के लिए किया जाता है जिसमें
आवश्यक संसाधन पर्याप्त नहीं होते हैं, आमतौर पर पैसा, जिसके
परिणामस्वरूप आय की तुलना में अधिक खर्च होता है। फिजूलखर्ची के संके तों
में नकारात्मक नकदी प्रवाह (जब व्यय राजस्व से अधिक हो) और बढ़ता हुआ
ऋण भार शामिल है
There are many different kinds of deficiencies, including
the following −

Budget deficit − This happens when expenditures for a

given time period are higher than income for that time
period. A deficit in the government leads to an increase in
the national debt.

Trade deficits − A trade deficit occurs when a country's

imports are greater than its exports. The local currency
may lose value and jobs may be lost as a result of this.

Though deficits are usually seen as a source of problems,

they may be created by design in some cases. In order to
boost the purchasing power of the public, the government
may raise spending while decreasing revenue, creating a
deficit scenario.
 WHAT IS BALANCE OF PAYMENT DEFICIT?
It is an unfavourable situation when the
country’s import is more than its export of goods
and services. It means that a country is spending
money more than it earns. In this case, it has to
borrow to pay for its imports. Thus, it creates a
problem for the economy. Under this:

1. Payment made by the country is certainly

more than the receipts received by the country.
2. This means that a country’s foreign currency
outflows exceed its inflows within a specific
period.
3. In simple words, Credit Side < Debit Side
Balance of payment deficit is given by –
(Current account + capital account receipts) <
(current account + capital account payments)

For example, If Export= Rs.150 lakh and

Import= Rs. 250 lakh, then there is a trade
deficit of Rs. 100 lakh
In the case of BoP Deficit, it must be noted that:

1. The official reserves can be used to amend the BoP deficit.

But, the decision regarding this lies with the Reserve Bank of
India. This is because RBI acts as a custodian of foreign
reserves and all foreign transactions are managed by the RBI.
The official reserves mean the overall balance of the Balance
of Payment account. ( Overall balance is the total of the
Current account, Capital account, and Errors and Omissions).
2. The decrease in the official reserves account signifies the BoP
deficit (for this reason the overall balance is negative).

3. The Reserve Bank of India (RBI) has the authority to manage

the currency and money supply. This authority is known as
the Monetary Authority. This final decision to finance the
deficit that arises in the country’s BoP lies with the RBI.
When the Balance of Payment is balanced,
it is said to be in equilibrium. But when
the country is either in surplus or deficit,
then it is said to be in
disequilibrium. Disequilibrium is a major
concern for the government, thus it is
necessary to understand its cause and
effects on the country
 Causes of BoP Deficit :
BoP deficit can arise due to several reasons. These are –

1.Rapid Economic Development

High outflow of foreign exchange to meet import demands like
technology, machines, and equipment can lead to BoP deficit.

2.Inflation
Sustained rise in a country’s prices can often make foreign
products cheaper, leading to a high volume of imports.

3.Political Disturbance
Unstable tax structures, change in government, etc. can lead to a
loss in foreign investment, and give way for BoP deficit.

Apart from these, factors like population explosion, change in the

preference and tastes of the general population, etc. can also
contribute to the balance of payment of a country.
 WHAT IS BOP SURPLUS
It is a favourable situation when the country’s
export is more than its import. The country can
create more capital to pay for its domestic
productions. An increase in the level of production
will ultimately help in the short-term growth of a
country. Under this:

1. Payment made by the country is certainly less

than the receipts received by the country.
2. This means that a country’s foreign currency
inflows exceed its outflows within a specific
period.
3. In simple words, Credit Side > Debit Side
Balance of payment surplus occurs when –
(Current account + capital account receipts) >
(current account + capital account payments)

For example, If Export = Rs. 500 lakh and

Import= Rs. 250 lakh, then there is a trade
surplus of Rs. 250 lakh.
DIFFERENCE BETWEEN BOP
SURPLUS AND BOP DEFICIT
THANKYOU