Question:
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?
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?
Updated On: Feb 10, 2025
- Efforts should be made to replace debt flows with equity flows
- The ratio of debt linked to equity should be limited to 1:4
- 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
No sovereign guarantee should be extended to private sector
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The Correct Option is B
Solution and Explanation
The Rangarajan Panel focused on measures to improve the balance of payments through various
strategies, including the encouragement of equity flows rather than debt flows and managing
foreign reserves to stabilize import cover. However, it did not specify a fixed ratio of debt
to equity like 1:4 as a recommendation. This detail is likely a confusion with other financial
guidelines or reforms that were proposed around similar times or in different contexts.
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