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Indian Economy

Notes 4. Iron and Steel: The imports of iron and steel have weakened over the years in percentage
terms. In 1990-91, the share of iron and steel imports was 5%, which has come down to 3%
in 2005-06. This is because; a good quantity of iron ore is now removed in India which has
reduced imports.
5. Fertilisers: Import of fertilisers in 1991-92 stood at $ 954 million. In 2003-04 spending on
import of fertilizers was $ 635 million.
The imports of fertilisers have weakened, which specifies less dependence of India on introduced
fertilisers. The share in total introductions of fertilisers was 4.1% in 1990-91, which came down
to 1.5% in 2005-06.

Notes Punjab State is predominantly an agricultural state with two-third of its population
directly or indirectly dependent on agriculture. And, thus, helps in increasing the Indian
Economy.

8.6 Balance of Payment on Current Account

This section emphasises on the balance of payment on current account. Balance of Payments
(BoP) statistics methodically reviews the economic dealings of an economy with the rest of the
World for a definite period. The Reserve Bank of India (RBI) is accountable for compilation and
distribution of BoP data. BoP is approximately consistent with the strategies and rules contained
in the BoP Manual of the International Monetary Fund.

Balance of payment (BoP) comprises current account, capital account, errors and omissions and
changes in foreign exchange reserves. Below current account of the BoP, dealings are categorised
into merchandise (exports and imports) and invisibles. Invisible transactions are further
categorised into three categories, namely:

Income
Services–travel, transportation, insurance, Government not included elsewhere (GNIE)
and miscellaneous (such as, communication, construction, financial, software, news agency,
royalties, management and business services)
Transfers (grants, gifts, remittances, etc.) which do not have any quid pro quo
Under the Capital Account, capital influxes can be categorised by instrument (debt or equity)
and maturity (short or long-term). The main workings of the capital account comprise foreign
investment, loans and banking capital. Foreign investment, comprising Foreign Direct Investment
(FDI) and Portfolio Investment consisting of Foreign Institutional Investors (FIIs) investment,
American Depository Receipts/Global Depository Receipts (ADRs/GDRs) represents non-debt
liabilities, although loans (external assistance, external commercial borrowings and trade credit)
and banking capital, comprising non-resident Indian (NRI) deposits are debt liabilities.
The data on merchandise skill are offered from two sources namely:

(a) From the Directorate General of Commercial Intelligence and Statistics (DGCI&S) on
customs basis;
(b) From RBI on payments (which includes both receipts and payments) basis.

The Daily Trade Return (DTR) is the main cause of recording spreads data at DGCI&S, while RBI
trusts mainly on the R-return furnished by Authorised Dealers (ADs) to collect the exports and

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