Journal Press India^®

Author Details ( * ) denotes Corresponding author

With economic liberalization in India, a major shift on the foreign exchange front was in the form of switching from a fixed exchange rate regime to flexible exchange rate regime. This shift led to some heavy and sudden fluctuations in the prices and volumes of exports and imports. The present study is an attempt to analyse the overall trends in India’s current account balance during the period 1970-71 to 2010-11. The analysis shows that merchandise trade did not play any role towards the improvements of current account balance. In fact, it deteriorated the current account balance during the time span of the study. On the other hand, invisibles as a whole showed a very small negative growth rate which in effect is negligible. Income head has led buoyancy to current account balance. The overall positive growth of current account balance is basically an indication of good management of current account balance.

Keywords

Current account balance, Trade, Growth rate

1. Coppock, J.D. (1977). International Trade Instability. Famborough: Saxon House, Teakfield Ltd
2. Department of Agriculture & Cooperation (2011).  Annual Report (2010-2011). Ministry of Agriculture, Government of India.
3. Nayyar, Deepak (1976). India’s Export and Import policies in the sixties. Cambridge: Cambridge University Press.
4. Ramane, V. Rajda; Rajendran, C. & R. Meera (2003). An Analysis on the trade performance of Indian agriculture since liberalization. In Y. K. Alagh (ed.), Globalisation and Agriculture Crisis in India, Chapter 12, Delhi: Deep and Deep Publication (P) Limited.   
5. Rao, C.H. Hanumantha, Ray, Susanta K. & Subbarao, K. (1988). Unstable Agriculture and Droughts: Implications for Policy. New Delhi: Vikas Publishing House Pvt. Ltd.
6. Ray, S.K. (1983a). An empirical investigation of the nature and causes for growth and instability in Indian agriculture: 1950-80. Indian Journal of Agricultural Economics, 38(4): 459-474
7. Ray, S.K. (1983b). Growth and Instability in Indian Agriculture. Institute of Economic Growth, Delhi, Mimeo.
8. Reserve Bank of India (2008), “Handbook of Statistics on Indian Economy 2007-08”, RBI, Mumbai
9. Sarkar, Prabirjit (1994). India’s balance of payments and exchange rate behaviour since 1971. Economic and Political Weekly: January 1-8
10. Sharma, H.R., Singh, Kamlesh & Kumari, Shanta (2006). Extent and source of instability in foodgrains production in India. Indian Journal of Agricultural Economics, 61 (4): 648-666
11. Singh, Manmohan (1964). India’s Exports Trends. New Delhi: Oxford (India) University Press
12. Tandon, Anjali (2003). Growth performance and instability of India’s agriculture exports: A pre and post Reform Analysis. The Indian Economic Journal, 36(3): 74-86.