Question
Indian Economy Question on Balance of payments (BOP)
The Rangarajan Panel on 4th June 1993 submitted recommendations related to Balance of Payment (BoP). Which one of the following was NOT a part of the Panel’s recommendations?
A
Efforts should be made to replace debt flows with equity flows
B
The ratio of debt linked to equity should be limited to 1:4
C
The minimum targets for foreign reserves should be fixed in such a way that the reserves are generally in a position to accommodate imports of 3 months
D
No sovereign guarantee should be extended to private sector
Answer
The ratio of debt linked to equity should be limited to 1:4
Explanation
Solution
The correct answer is (B): The ratio of debt linked to equity should be limited to 1:4