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Internal and External Financing - India’s five year plans, Indian Economy Video Lecture | Indian Economy - B Com
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FAQs on Internal and External Financing - India’s five year plans, Indian Economy Video Lecture - Indian Economy - B Com
| 1. What are internal and external financing in India's five year plans? |  |
Ans. Internal financing refers to the funds generated within the country through various channels such as taxation, borrowing from the public, and profits earned by public sector enterprises. On the other hand, external financing refers to the funds obtained from sources outside the country, such as foreign direct investment, external loans, and grants.
| 2. How do India's five year plans contribute to the Indian economy? | |
Ans. India's five year plans play a crucial role in shaping and developing the Indian economy. They provide a comprehensive framework for the allocation of resources, setting development goals, and implementing various policies and programs. These plans focus on key sectors such as agriculture, industry, infrastructure, and social welfare, aiming to achieve sustainable economic growth, reduce poverty, and improve the standard of living.
| 3. What are the main sources of internal financing in India's five year plans? | |
Ans. The main sources of internal financing in India's five year plans include tax revenues, borrowings from the public through the issuance of government securities, profits earned by public sector enterprises, and surplus funds from various government departments. These funds are used to finance development projects, infrastructure development, social welfare programs, and other priority areas identified in the plans.
| 4. How does external financing contribute to India's five year plans? | |
Ans. External financing plays a significant role in India's five year plans by providing additional funds to meet the country's development requirements and bridge any resource gaps. Foreign direct investment (FDI) brings in capital, technology, and expertise, which can boost industrial growth and create employment opportunities. External loans and grants provide financial assistance for infrastructure development, capacity building, and implementation of various projects.
| 5. What are the challenges associated with internal and external financing in India's five year plans? | |
Ans. There are several challenges associated with internal and external financing in India's five year plans. Internal financing may face constraints due to inadequate tax revenues, high fiscal deficits, and limited availability of funds from public borrowings. External financing may be affected by factors such as exchange rate fluctuations, global economic conditions, and geopolitical risks. Additionally, ensuring effective utilization of funds, addressing corruption, and maintaining a balance between internal and external debt are also challenges that need to be addressed for successful implementation of the plans.
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Dec 23, 2024 Last updated |
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