[Economy Lecture] Capital Account Convertibility, Balance of Payment, Rupee Devaluation, Eurozone Quantitative Easing & Greece Anti-Austerity

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IAS Mock Interviews
  1. Prologue
  2. L3/P1: Balance of Payment (BoP) & Current Account Deficit
  3. L3/P2: Rupee Devaluation & Exchange rate regimes
  4. L3/P3: Capital account Convertibility & Tarapore Committee
  5. L3/P4: ECB quantitative easing & Greece Anti-Austerity


  • Sixth lecture was done on 20th February 2015, and uploaded on youtube. Total ~2:30 hours but I’ve split it into four parts.
  • PowerPoint of the lecture, available at Mrunal.org/Download
  • Medium of instruction- Hindi.
  • English version not possible for the moment, because I’m required to teach at this batch, in Hindi/Gujarati only. Besides, same content is available in English-text articles and English PPTs on the site.

L3/P1: Balance of Payment (BoP) & Current Account Deficit

Balance of Payment CAD Explained

  • Brief recap of the previous lectures
  • What is balance of payment (BoP)? Definition, methodology.
  • How is World’s balance of payment zero?
  • How is India’s balance of payment zero? And if so, why did we have a balance of payment crisis in 1991?
  • Two components of BoP: current account and capital account
  • Components current account balance: visible and invisible part.
  • Current Account: Services, income, transfer, gifts donations and remittances
  • Concepts: Balance of trade, trade deficit and trade surplus. Major imports and exports of India.
  • Calculating current account deficit and current account surplus.
  • Difference between FDI and FII
  • What is forex reserves? How is it built? What are the components of forex reserves?


L3/P2: Rupee Devaluation & Exchange rate regimes

Rupee Devaluation

  • if $1=50 or $1=60: who decides this exchange rate and how?
  • Fixed exchange rate regime: mechanism and limitations.
  • Floating exchange rate regime: mechanism limitations.
  • Difference between devaluation and depreciation of Rupee
  • Difference between revaluation and appreciation of rupee?
  • Historic trend of Indian rupee’s fall/weakening against US dollar
  • How does devaluation of the currency boost its exports?
  • Difference between NEER and REER? How does it help determining whether currency is undervalued or overvalued?
  • “Managed” floating extended rate regime.


L3/P3: capital account convertibility

UPSC Economy Study Material Capital Account Convertibility Tarapore Committee

  • What is “convertibility”? Why do we need to impose quantitative restrictions on convertibility between Indian rupee and foreign currency?
  • What is “full” current account convertibility?
  • What is capital account convertibility? Why does India have “partial” capital account convertibility?
  • Under FEMA, What are the quantitative restrictions put on current account and capital account convertibility?
  • What is capital account liberalization?
  • Features of Liberalized remittance scheme (2004)?
  • Arguments in favour and against of capital account convertibility and capital account liberalization.
  • How did full capital account convertibility lead to collapse of East Asian economies in 1997?
  • Recommendations of S.S.Tarapore Committee and why time not yet ripe for implementation of full capital account convertibility in India.


L3/P4: ECB quantitative easing & Greece Anti-Austerity

UPSC Economy ECB quantitative easing

  • Why does European Central bank (ECB) want to begin quantitative easing or Eurozone bond purchase program from March 2015?
  • Mechanism of ECB-QE.
  • Arguments in favour and against quantitative easing by ECB.
  • How does it affect India’s economic interests?
  • What is the Greece sovereign debt crisis?
  • Why has ECB refused to incorporate Greece Bond purchase in its QE program?
  • Why do Greek Leftist party “Syriza” and its leader Alexis Tsipras are pursuing “Anti-austerity” campaign?
  • Possible implications if Greece leaves Eurozone?


Mrunal recommends

  1. (free) NCERT, NIOS, TN-Books 4 History,Geo,Sci
  2. Indian Polity M.Laxmikanth (Hindi | English)
  3. Spectrum: Modern History (Hindi | English)
  4. Maths: Quantam CAT Sarvesh Kumar
  5. Objective General English SP Bakshi
  6. Word Power made Easy -Norman Lowe
  7. Topic wise Solved Paperset by Disha

68 Comments on “[Economy Lecture] Capital Account Convertibility, Balance of Payment, Rupee Devaluation, Eurozone Quantitative Easing & Greece Anti-Austerity”

    1. Plse sir provide u r study material in the pdf form. I’m unable to read or download to u r lectures on the online form!!

  1. Tusi great ho pazi
    Ag pani aur mrunal bhai se panga nahi

    1. Sahi he bhai….Mrunal sir ka koi dusra option hi nahi he..

  2. have you explained GST in your videos.. please reply

    1. all those topics with future budget and economic survey lectures.

      1. Budget and Economic Survey? Wohoo!! You’ve made my day Mrunal sir! Thousands of aspirants are at your mercy, waiting for the relief! And please do write on how to approach the humongous Year Book.

  3. Sir,
    I want to know that, is there any chance that upsc will give another attempt to all those students who appeared for prelims in 2011as promised by Jitendra Kumar.
    Please clarify the doubt.Thanks.

    1. Certainly! As it was statement given to media and failing to it will ignite another era of protest & dharna pradarshan.

      1. Thank you so much…….

  4. can you tell me that studying rc tiwari ,geography of india is good book to start geography topic ??????please suggest experienced players…

  5. thank u very much sir

  6. Tnx g ….explain bahut acche se kiya h very nice tab par bhi na koi exam clear na kar paye toh bahut sad feel hota h some time general cut off very high …but okay . Sir g awesome work.

  7. Sir, can I get SPIPA coaching material .

    1. SPIPA is a sarkaari institute. they don’t have any ‘coaching-material’ of their own.

      1. sir kindly provide pdf lecture also along with youtube lecture.

  8. your are a boon for the student who can not afford geediness of dilliwalah. thanq sir jee…..

    1. Not dilliwalah but yes greediness of coaching centres.


  10. mrunal bhai english version

  11. Where is earth’s south magnetic pole…?

    1. Earth’s magnetic south pole is infact the geographic north pole. This is a convention and that is why the north pole of the magnet points towards the geographic north pole (which is magnetic south pole, opposite polarity attract each other)

  12. Dear Mrunal,

    The strategy (books, study material) you have recommended for prelims is very useful. Could you please provide some such suggestions for the mains GS papers as well.

  13. at geographical south pole.

    1. You mean both geo &agneticsouth pole on same place?

      1. NO!
        Geomagnetic poles are slightly shifted from Geographical Poles.
        the Geographical axis is tilted by 9.7 degrees with respect to Geo-magnetic axis.

  14. thank u sir,for your great effort

  15. very nice explain and very use full to all exams, than Q

  16. Dear sir,
    Will u upload videos for history ,polity and for mains also….please reply sir i have to prepare accordingly

  17. Sir, you became so discriminatory against non-Hindi students. You have completely stopped publishing anything in English for so long. mrunal.org has no relevance to non-Hindi students anymore.

    1. true.. sir please atleast give subtitles in English :(

  18. thankyou sir for your efforts. you make economics easy…

  19. HI Mrunal Bhai,
    Can we get the slides of these classes

    1. Check Downloads section.

  20. sir,
    thanku soooo much. i started for preparing economy as per ur guide lines nd ur videos.
    i stay in hyd., went for coaching in Brain tree(himayatnagar)…. not evn 1% have been taught der mainly economy..othr subjects wr good.iam not critising the institu e, its totally my opinion ,bcz economy was vry bad der.
    so i fully started my prepartn as per ur guide lines., & i thanku sooooo much like i dnt have words to praise U!!

    wen ill clear my civils…then defintly 100% its totallly ur credit…i defintly contact u aft im done wd my goal!!

    once again i Thanku You soooooooooooooooooooooooooooooo much sir!!!!

  21. Mrungal, one request : Your YouTube videos requires high speed Internet to watch. So my sincere request is to publish the article in this website (in content form) too so that some players who’re not able to watch those videos can read the material here itself. It would be great effort if you can do so. I know its requires manpower + time + enthusiasm to do the work twice. I hope you would cooperate in this process.

    1. if you download powerpoint, most of the stuff is automatically explained even without looking at the video.

  22. Sir, since the lecture is in Hindi, people like me who don’t understand Hindi are not able to be benefited from it. Can you please give it in English if possible.

  23. thank you sir ji explain very well but some time bas define kar diya kro aap faltu m deep main explain krte ho. thank you.

  24. Dear sir my name is Arvind and I belongs to rural area.Nowadays you posting your notes on you tube but in rural area its difficult to see them because of bad networks. Do something for me and others also.

    1. you can never be sure how much easy or deep UPSC will ask in prelims, mains and interview.

      1. haan ye toh h ….ATB

    2. download them by putting them on download in night. by morning they will be downloaded. now u can watch whatever times u want. use applications like youtube downloader(ytd) to download.


  26. Sir kindly provide a link to the same content scattered on this site in form of CLICK ME also it would be very convenient. To some like me reading seems more effective then learning from audio – visual aids…It would be of immense help sir

  27. Mrunal please update georgraphy slides of oceanography,as in present lecture some slides are added which i could not find in slides given by ur link
    So please upload slide through which mam is teaching

  28. sir pleas upload video of history csat sub

  29. Sir,
    I could not find english text articles. Could you send it to my mail or tell me how i will find.

  30. sir, i am m.tech first year student .i wanna ask , how to improve english grammer .. any suggestations.

  31. Sir.kindly post in English so that everyone can understand

  32. Gurudev once you used to advise the volunteers who wished to post blogs on your website that the content should be easily accessible by GARIB 2G JUNTA also.
    But now why such extreme shift in your welfare doctrine? Almost all your lectures are being posted as video lectures!!!

  33. simple articles updates dete jaaon na yaar
    kahe ko ye lecture baaji…?

    everybody cant afford “3g connection” to see your lectures…

    if there is article we can easily “scroll” down…
    saves our time…
    and we enjoy articles only…

  34. please make available more such economics notes

  35. i want to subsribe to mrunal current affairs,economics and other general studies papers

  36. mrunal sir…plz answer ,,,i have turned 30 this feb. ..will i b eligible for upsc 2015..?…general category…female

  37. Which book is better for human geography and world geography for upsc mains?

  38. thanks alot sir , u made econmics a simple and easily digestable subject …….

  39. i have a doubt sir,
    it is said that to stop depreciation rbi sells dollar and it is also said that to stop weakening of rupee rbi has to stop outflow of dollar.
    Isn’t it contradicting?
    pls clarify sir

  40. Please continue posting TEXT articles rather than posting videos because it helps in revising in exam time…We dont get enough time to watch full videos in last moment.

  41. capital account convertibility book se padhke toh kuch kuch samajh me aaya tha, par aapke video lecture se pata chala ki woh kitna kam tha..conceptual clarity ke liye bahut dhanyavad Sir!

  42. An english article on capital account convertibility please?

  43. sir the ppt is not available on the link provided. pls help.

  44. Thanks Sir ji you made economics very simple

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