According to NCERT, a country need not worry about its foreign exchange if it builds up its foreign exchange earnings by:
Answer & explanation
Correct answer: option 4
The correct answer is Option (4) → sustainable export of manufactured goods
Foreign exchange earned by sustainable export of manufactured goods is steady, so the country need not worry.
Pakistan shows the other side. Its foreign exchange came mostly from remittances and highly volatile farm exports, and it depended more and more on foreign loans that were hard to pay back. India too had to borrow from the IMF and World Bank to set right its balance of payments crisis. These sources are not steady.
NCERT (2026-27): “8.6 Development Strategies — an Appraisal … You will recall that India had to borrow from the IMF and World Bank to set right its balance of payments crisis; foreign exchange is an essential component for any country and it is important to know how it can be earned. If a country is able to build up its foreign exchange earnings by sustainable export of manufactured goods, it need not worry. In Pakistan most foreign exchange earnings came from remittances from Pakistani workers in the Middle-east and the exports of highly volatile agricultural products; there was also growing dependence on foreign loans on the one hand and increasing difficulty in paying back the loans on the other. …” |