SRI KARTHEKEYA IAS ACADEMY

CURRENT AFFAIRS
LECTURE - 1
TOPICS

BALANCE OF PAYMENT

How we can decide whether a country is

Developed, Developing or Under Developed ?
FLASH POINT 1 BALANCE OF PAYMENT

How we can decide whether a country is

Developed, Developing or Under Developed ?

DETAILS CURRENT ACCOUNT CAPITAL ACCOUNT

Developed Country Surplus (+) Surplus (+)

Developing Country Surplus (+) or Deficit (-) Deficit (-) or Surplus (+)

Under Developed Country Deficit (-) Deficit (-)

Definition of BALANCE OF PAYMENT
CURRENT ACCOUNT
1 TRADE IN PHYSICAL GOODS
2 SERVICES
3 PRIMARY INCOME
4 SECONDARY INCOME
CAPITAL ACCOUNT
1) FOREIGN PORTFOLIO INVESTMENT (FPI)

USA

HOT MONEY

• Volatile in nature ( Unstable)

• Crash in Stock markets
• Emerging economies will be affected due to capital inflows
What is HOT MONEY ?

USA

• It moves from one country to another

• Moves from low interest rate yielding countries to
high interest rate yielding countries
• To maximize interest gain
2) FOREIGN DIRECT INVESTMENT (FDI)

USA

SWITZERLAND

• Stable
• Supplements GDP
• Creates Employment
SOUTH KOREA • Stays for Longer duration
 INDIA’s BALANCE OF PAYMENT
_
+
CURRENT ACCOUNT CAPITAL ACCOUNT

TRADE IN
PRIMARY SECONDARY
PHYSICAL SERVICES FPI FDI
INCOME INCOME
GOODS
_ + + + + +

Case 1 : Decrease Your Imports HOW ???

WHY ???
Case 2 : Increase Your Exports HOW ???
HOW TO SOLVE ???
Case 1 : Decrease Your Imports
For Example : What is the Transportation cost if we transport 200KMs with 5000 TONNE weight
Iron Coils from Delhi to Haldia Through Roadway, Railway, Waterway, …….
Distance = 200 KMs
Delhi Haldia
Weight = 5000 TONNE

According to PIB : Transportation cost Through:

Road Way = 1KM / 1 TONNE = 1.55 Rs/- Road way = 200 * 5000 * 1.55 = 15,50,000 Rs/-
RailWay = 1KM / 1 TONNE = 1.00 Rs/- Railway = 200 * 5000 * 1.00 = 10,00,000 Rs/-
Water Way = 1KM / 1 TONNE = 0.20 Rs/- Water way = 200 * 5000 * 0.20 = 2,00,000 Rs/-

So here it is clear that, If we transport our goods through inland water ways ,
then No Need to import Excess crude oil from other Countries.
Though both countries are blessed with Rivers
China’s total inland transportation through water ways is 51%
India’s total inland transportation through water ways is 6%
 NATIONAL
WATERWAYS
INDUSTRIAL CORRIDORS

Also Called As
“ GOLDEN QUADRILATERAL”

These are ROADWAYS,

Connecting DMIC,
MBEC, BCIC, VCIC, AKIC
CORRIDOR STARTING POINT ENDING POINT DEVELOPED BY

DMIC Delhi Mumbai JAPAN

AKIC Amritsar Kolkata GOI

VCIC Visakhapatnam Cheenai ADB

MBEC Mumbai Bangalore UK

BCIC Bangalore Cheenai JAPAN

DEDICATED FREIGHT
CORRIDORS

Also Called As
“ DIAMOND
QUADRILATERAL”

These are RAILWAYS,

Connecting WDFC, EDFC,
NSDFC, SDFC, EWDFC
CORRIDOR STARTING POINT ENDING POINT DEVELOPED BY

WDFC Dadri Jnpt JAPAN

EDFC Ludhiana Dankuni GOI

ECDFC Vijayawada Kharagpur ADB

EWDFC Mumbai Kolkata ---

SDFC Marmagao Cheenai ---

NSDFC Delhi Cheenai ---

Case 2 : Increase Your Exports
From URANIUM.,
We can generate Electric Power using Nuclear Fusion type reactors for Peaceful purposes…
We can built Atomic Bombs using Nuclear Fission type reactors for Destructive purposes…

So UNSC Permanent Member’s introduced NUCLEAR SUPLIERS GROUP & NUCLEAR NON PROLIFERATION TREATY.
Members of NSG can export Ur,Th,Pu and advanced Fusion type Nuclear Reactors to other NPT countries.

To become a member of the NSG, First our India should be a member of UNO, next member of NPT, next all NSG
members should accept us to be a part of it.

Organizations Is INDIA a member ?

UNO ✓
NPT × WHY INDIA NOT SIGNING NPT
NSG ×

Conditions of NPT India accepted

Never ever conduct any Nuclear Tests further. ✓
Never export any Nuclear resources and advanced
✓
Nuclear Reactors to NON – NPT countries.
Sign MTCR ✓
Denuclearization your existing Nuclear weapons. × WHY INDIA NOT SIGNING 4th CONDITION OF NPT
 If PLAN – A fails then we should execute PLAN – B

PLAN A
India tried To become a member of NSG

PLAN B
India trying to become a member of the UNSC (PM)
Which gives us a status of Law makers, which results India by
default becomes a member of the NPT and NSG.
But.,
To become a Permanent Member of the UNSC, we should get 128
members support out of 193 members of UNO
China’s BELT AND ROAD INITIATIVE
The New Eurasian Land Bridge,
which runs from Western China to Western
Russia through Kazakhstan, and includes
the Silk Road Railway through
China's Xinjiang Autonomous Region,
Kazakhstan, Russia, Belarus, Poland and
Germany.
The China–Mongolia–Russia Corridor,
which will run from Northern China to the Russian
Far East. The Russian government-
established Russian Direct Investment Fund and
China's China Investment Corporation, a Chinese
government investment agency, partnered in 2012
to create the Sino-Russian Investment Fund,
which concentrates on opportunities in bilateral
integration.
The China–Indochina Peninsula
Corridor, which will run from Southern
China to Singapore.
The China–Central Asia–West Asia
Corridor, which will run from Western
China to Turkey.
The Bangladesh–China–India–
Myanmar (BCIM) Economic
Corridor, which runs from southern
China to Myanmar and is officially
classified as "closely related to the Belt
and Road Initiative".
The China–Pakistan
Economic Corridor(CPEC)
which is also classified as "closely
related to the Belt and Road
Initiative",a US$62 billion collection
of infrastructure projects
throughout Pakistan which aims to
rapidly modernize Pakistan's
transportation networks, energy
infrastructure, and economy. On
November 13, 2016, CPEC became
partly operational when Chinese
cargo was transported overland
to Gwadar Port for onward
maritime shipment
to Africa and West Asia
STRING OF PEARLS
India’s PROJECT MAUSAM
 SAGARMALA PROJECT
Deen Dayal Port

Syama Prasad
Mukherjee Port

Kamrajar Port
V.O. Chidambaranar Port
TRADE ROUTE
TO
CENTAL ASIA
INTERNATIONAL NORTH SOUTH
TRANSPORT CORRIDOR
 WILL BE
CONNECTED
TO
SEVEN SISTER
CORRIDOR
KALADAN
MULTI
MODAL
TRANSIT
TRANSPORT
FACILITY