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Important Aspects To Cover Under 'External Sector' (for UPSC CSE)
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This lesson focuses on the aspects students need to cover for studying Economics. It throws light on what all to understand with respect to how India's foreign policy is designed, what are External Commercial Borrowings, Capital and Current Account Convertibility, Laws like MRTP, FERA and FEMA act. It also tells to focus on concepts like Current Account Deficit, Appreciation/ Depreciation of Indian Rupee, a difference between depreciation and devaluation of the currency, currency exchange rate and many more concepts. Also, certain questions are picked as an example of how questions can be asked in Prelims and how they must be answered.

Ayussh Sanghi is teaching live on Unacademy Plus

Ayussh Sanghi
Passionate Educator - CSE / Other Govt Exams [Peep into my Unacademy Plus Courses & experience awesome learning.]

Unacademy user
awesome presentation with pictures... it is easy to remember and recalling
Sir its not syllabus but the way of notes needed for revision..thank u sir
sir..every topic that you mentioned in this lesson about external sector is of utmost confusion to me. can you please explain the entire external sector would be of great help sir..
Thank you Sir........................ Thanks to unacademy.................................

  2. ABOUT ME Passionate about Teaching >Taught at most reputed Civil Services Institutes >CA, Lawyer Follow me on: AyusshSanghi

  3. UNIT VI - EXTERNAL SECTOR How has India's Foreign Policy been designed? o Recent initiatives taken by the government regarding FP? o What is Balance of Payment (BoP)? O What constitutes BoP? o What is BoP Crises? What do you understand by Invisibles? How does it affect BoP?

  4. UNIT VI - EXTERNAL SECTOR What are External Commercial Borrowings (ECB)? o What does ECB constitute? o What is it required? o Who regulates it? o Who borrows from it? o Example: Corporate sector, Firms or Government

  5. UNIT VII EXTERNAL SECTOR Capital Account Convertibility and Current Account Convertibility- India has full Current Account Convertibility but when it comes to Capital Account Convertibility, it is only partial. Should we convert to Full Capital Account Convertibility?

  6. UNIT VI - EXTERNAL SECTOR Certain Other Laws: o MRTP Act, 1969; FERA, 1973; o FEMA, 1999

  7. UNIT VI - EXTERNAL SECTOR Concept of Current Account Deficit (CAD) O What is it? o What is the limit of CAD? o Why India has huge CAD? o is a Is a minimum CAD necessary? o Measures taken by India to reduce CAD?

  8. UNIT VII EXTERNAL SECTOR Appreciation/Depreciation of Rupee o How does Rupee Appreciation/ Depreciation take place? o How does Rupee Appreciation/ Depreciation take place? o How is Rupee value determined? Reasons behind Rupee appreciation or depreciation? It's Impact on domestic and external market? On imports and exports. What measures does RBI take to stabilise rupee appreciation/ depreciation? How does it impact Forex Reserves?

  9. UNIT VI - EXTERNAL SECTOR Depreciation v/s Devaluation of Rupee What is Devaluation of Rupee? Difference between Depreciation and Devaluation of currency (in Indian - rupee) Why does a country devaluate its currency? Example - China devaluing it's currency

  10. UNIT VI - EXTERNAL SECTOR Currency Exchange Rate o How is the Exchange Rate of a currency determined? What are the criterias considered to determine the same? Exchange rate in terms of Purchasing power parity (PPP) o What is Nominal Effective Exchange Rate (NEER), Real Effective Exchange Rate (REER)? Differences between the above two?

  11. PRELIMS 2014 With reference to Balance of Payments, which of the following constitutes/constitute the Current Account? 1. Balance of trade 2. Foreign assets 3. Balance of invisibles 4. Special Drawing Right Select the coret answer using the code given below. Select the correct answer using the code given below A. B. C. D. 1 only 2 and 3 1 and 3 1, 2 and 4 Solution (c)

  12. PRELIMS 2012 Consider the following statements: The price of any currency in in the: ternational market is decided by 1. World Bank 2. Demand for goods/services provided by the country concerned 3. Stability of the government of the concerned country 4. Economic potential of the country in question Which of the statements given above are correct? (a) 1, 2, 3 and 4 (b) 2 and 3 only (c) 3 and 4 only (d) 1 and 4 only Solution (b)