Question

"The Government had launched Incredible India Campaign to promote tourism in various parts of the country."
Elaborate the impact of Incredible India Campaign on foreign exchange reserves and Balance of Payment of India.

Hint:

More tourism = more foreign exchange inflow via services export, improving BOP.

Answer 1

The Incredible India Campaign encourages foreign tourists to visit India, thereby increasing foreign exchange earnings. This improves the current account of the Balance of Payment (BOP) by increasing the inflow of foreign currency through tourism services (an invisible item in BOP). It positively affects foreign exchange reserves, strengthening the rupee and enhancing India’s international financial position.