Mention the main elements of Capital Accounts.

1.	Mention the main elements of Capital Accounts.
Answer» Following are the main elements of Capital Accounts of Balance of Payment in India: (i) Foreign investment: In this, foreign investors purchase domestic companies and also establish the units of business in the domestic economy. There are two types of foreign investments : (a) Direct Foreign Investment. (b) Portfolio investment. (ii) Loans : In this, borrowings are included. These are of two types : Foreign aid and Commercial loans. (iii) Banking Capital: In this, mainly those banks and financial institutions are included, which officially work under foreign exchange market.

Answer»

Following are the main elements of Capital Accounts of Balance of Payment in India:
(i) Foreign investment: In this, foreign investors purchase domestic companies and also establish the units of business in the domestic economy.
There are two types of foreign investments :
(a) Direct Foreign Investment.

(b) Portfolio investment.

(ii) Loans : In this, borrowings are included. These are of two types : Foreign aid and Commercial loans.

(iii) Banking Capital: In this, mainly those banks and financial institutions are included, which officially work under foreign exchange market.

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