DMPQ- Explain the concept of capital account convertibility. Compare the advantages and disadvantages of full capital account convertibility.

. Capital Account Convertibility is a feature of a nation’s financial  regime that centers on the ability to conduct transactions of local financial assets (money, stocks, bonds,  real estate, FDI, FII, account receivable, inventory etc) into foreign financial assets freely and at market  determined exchange rates. In layman’s terms, full capital account convertibility allows local … Read more

DMPQ- Write a short note on followings: (A) National investment fund (B) Non-tariff trade barriers (C)Participatory notes or P-notes

(A)National investment fund The cabinet Committee on Economic Affairs (CCEA) on 27th January,  2005 had approved the constitution of a National Investment Fund (NIF). The Purpose of the fund was to  receive disinvestment proceeds of central public sector enterprises and to invest the same to generate  earnings without depleting the corpus. The earnings of the … Read more

DMPQ- Explain why India introduced GAAR (General anti avoidance rules). Also mention the recommendations given by Parthasarathi Shome committee for GAAR.

Tax Avoidance is an area of concern across the world.  The rules are framed in different  countries to minimize such avoidance of tax.  Such rules in simple terms are known as ‘General Anti  Avoidance Rules’ or GAAR. Thus, GAAR is a set of general rules enacted so as to check the tax avoidance.  It empowers … Read more

DMPQ- . Write a short note on followings: (A) Performance budget (B) Revenue deficit (C) Quantitative Easing

(A) Performance budget Unlike the traditional line item budget, a performance budget reflects the  goal/objectives of the organization and spells out performance targets. These targets are sought to be achieved through a strategy(s). A Performance Budget gives an indication of how the funds spent are expected to give outputs and ultimately the outcomes. However, performance … Read more

DMPQ- Briefly discuss the concept of Base erosion and profit shifting.

. It refers to the effect of tax avoidance strategies used by  multinational corporations on countries’ tax basis. The term was used for the first time by OECD. In an  increasingly interconnected world, national tax laws have not kept pace with global corporations, fluid  capital, and the digital economy, leaving gaps that can be exploited … Read more

DMPQ-Discuss the biggest obstacles hindering regional trading .

. The first and foremost issue is defining the ‘sensitive list’, or a negative list which would not be open to trade,  those product lines on whom tariffs would not be reduced. This is also referred as trading  to a negative list, which means trading in goods, other than those in the negative list. Very  … Read more

DMPQ- . Throw light on the implications of rupee depreciation on Indian economy.

. First, India’s imports comprises of essentials such as crude petroleum, machineries and  fertilizers which become expensive raising their prices facilitating ‘import’ of inflation.  India is very susceptible to a stubborn and sticky inflation. It hurts the masses in terms of  across the board higher prices. All imports become expensive including raw materials, goods and … Read more

DMPQ- Trace India’s progress towards market exchange rate.

Managed float regime is the current international financial environment in which exchange rates fluctuate from day to day, but central banks attempt to influence their countries’ exchange rates by buying and selling currencies. It is also known as a dirty float. India’s exchange rate policy has evolved over time in line with the gradual opening … Read more

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