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| 1. |
How is cancellation of coal blocks allocation by Supreme Court ot India likely to atfect our current account deficit (CAD)? |
| Answer» Solution :The Supreme Courts decision to CANCEL coal blocks is likely to cause a FALL in SUPPLY of coal, particularly for production of electricity. A cut in domestic supply of coal is bound to cause a rise in imports. This will increase our import payment of FOREIGN exchange which will further increase our CAD, other THINGS remaining unchanged. | |