During the year 2022‑23, India's export of goods earned ₹21 lakh crore and import of goods cost ₹25 lakh crore. After liberalisation measures in 2024‑25, exports rose by 12 % and imports rose by 8 %. Calculate the change in the current‑account balance (in ₹ lakh crore) due to these changes.
Answer
₹0.52 lakh crore improvement (deficit reduced).
The correct answer is ₹0.52 lakh crore improvement (deficit reduced). — Determine the change: (‑3.48) – (‑4) = 0.52 lakh crore improvement.
Step-by-step solution
- Compute the initial current‑account balance: 21 – 25 = ‑4 lakh crore (deficit).
- Calculate the new export value: 21 × 1.12 = 23.52 lakh crore.
- Calculate the new import value: 25 × 1.08 = 27.00 lakh crore.
- Find the new balance: 23.52 – 27.00 = ‑3.48 lakh crore.
- Determine the change: (‑3.48) – (‑4) = 0.52 lakh crore improvement.
Common mistake: Treating the deficit as a positive number and subtracting it incorrectly, leading to a wrong sign for the change.
Concept tested: Current‑account impact of globalisation
Published · How this solution was prepared and checked
Related questions
- 1 The foreign‑direct investment (FDI) inflow into India during FY 2021‑22 was ₹9,00,000 crore. After a set of liberalisation measures, the inflow increased by 25 %. Calculate the total FDI inflow after the increase.
- 2 India signed the WTO agreement in 1995. Suppose the average tariff on an imported electronic gadget was 30 % before WTO compliance, and after compliance it was reduced to 12 %. If the world price of the gadget is ₹20,000, calculate the amount saved per gadget for an Indian consumer after WTO compliance. Choose the correct answer.
- 3 Explain two impacts of globalisation on Indian agriculture, mentioning one positive effect and one negative effect.
- 4 Which of the following is NOT considered a direct benefit of globalisation for Indian consumers?
- 5 What is the best definition of “globalisation” as used in economics?
- 6 India’s GDP is Rs 250 lakh crore. The tertiary sector currently contributes 54% of GDP. If its share is expected to increase by 1.5 percentage points each year for the next 3 years, what will be the monetary contribution of the tertiary sector after 3 years? Give your answer in Rs lakh crore, rounded to two decimal places.