Current and Capital Account — Mains Questions

"India's Current Account Deficit (CAD) is a structural challenge, yet its financing through capital inflows has largely remained stable." Discuss this statement in the context of India's external sector performance and the role of policy measures. (250 words, 15 marks)

Examine the implications of capital account liberalization for India's economic growth and financial stability. What are the key preconditions for a successful transition to fuller convertibility, as highlighted by expert committees? (250 words, 15 marks)

"The Reserve Bank of India's (RBI) role in managing India's Balance of Payments extends beyond mere regulation to active intervention and policy formulation." Elaborate on this statement with specific reference to the current and capital accounts. (250 words, 15 marks)