Explain Capital Account Convertibility and its impact on the Indian Economy.

Question

Accepted Answer

Capital account convertibility refers to the freedom to convert local financial assets into foreign financial assets and vice versa.

Capital account convertibility allows for unrestricted flow of capital in and out of a country.
It can lead to increased foreign investment and economic growth.
However, it can also lead to volatility in the economy and currency fluctuations.
India has been cautious in implementing full capital account convertibility due to concerns about its impact on the economy.
India has gradually liberalized its capital account over the years, but still maintains some restrictions.

Accepted Answer

Capital account convertibility refers to the freedom to convert local financial assets in to foreign financial assets and vice versa. Capital account convertibility allows for unrestricted flow of capital in and out of a country. 
Capital account convertibility lead to increase foreign investment and economic growth

Explain Capital Account Convertibility and its impact on the Indian Economy.

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