1. INTRODUCTION

Balance of Payment (BOP) gives an in depth data concerning the demand and supply of a nation's money and assumes a vital part in financial advancement of a nation. BOP of a nation should be steady in the short as well as the long run. It should not be in deficit as well as in surplus in light of the fact that it is not favorable in both conditions.

BOP can likewise be utilized to assess the performance of the nation in the global financial rivalry. In addition, the impact of increment and decline in adjust of exchange is seen in assurance of adjust of installments (BOP) of nation. BOP is built up strategy which is utilized for the bookkeeping of any nation's aggregate installments made amid the particular time frame and the receipts gathered from some other nation from private segment or government trade sources. It can fundamentally influence the financial strategies of a nation's legislature and the economy itself. In this way, every nation endeavors to a have a good parity of installments and keeps up its long run maintainability. India's trade balance position was very ominous amid the season of nation's entrance into changed exchange administration. Two decades of financial amendment and organized commerce activities opened a few open doors that, obviously, reflected to be determined of trade balance of the nation.

Components:

The current account connotes the net income of a nation. It would demonstrate a surplus if there are profit and Deficit if there are more spending. It is the sum of the trade balance, factor salary (income on remote ventures less installments made to outside financial specialists) and money exchanges. It is known as the current account as it covers exchanges in the "at this very moment" – those that don't offer ascent to future cases.

a) Capital account – For recording any difference in proprietorship in foreign resources.

E.g. -Foreign trade operations of Central Bank, Loans and speculations betweennations.

b) Current Account – Includes the future premium and profit gained on investment. Since these are profit they will be recorded in Current Account.

In broader terms, Capital record expresses that any present record surplus will be adjusted met by a capital record of a similar size i.e. comparative sum or it can likewise be adjusted by the surplus it has. The adjusting figure can be negative or positive. It adjusts the current and capital record contrasts which can occur because of factual errors.

Trends-

India's trade balance position has demonstrated seasonal changes since the initial five-year plan (1951-52). It was the main time frame that did not encounter issues identified with India's trade position. Since the 2nd five – year plan, India has seen issues of varying intensity as reflected by the India’s trade position. Before the end of 1980, the circumstance achieved an emergency point.

2. SYSTEMATIC LITERATURE REVIEW:

Following the general rules, we have assessed articles closely related to Indian economy and its BOP. We have also discussed the scope and the technique of identifying related literature.

Scope-

The review is mainly focused on the secondary data obtained from academic journals, otherwise called 'certified information' since they have experienced an earlier survey by the researchers. Content wise, the review highlights the main focus of the research topic i.e. what affects the Indian BOP, how it is determined and how does the government ensure a steady economic growth. (Refer table 1 for keywords and table 2for database search) Identification of relevant Literature

Table 1: Keywords used in the literature review

1. GDP	6. Exchange rate
2. India's gold reserves	7. Foreign exchange reserves
3. Foreign direct investment	8. Factor payments
4. Transfer payment	9. Factor earnings
5. Financial accounts	10. Trade deficit

The Studies focuses more on National performance since we have concentrated on macroeconomic determinants and excludes microeconomic variables.

3. METHODOLOGICAL REVIEW:

This provides an overview of the methods used in completing this analysis of macroeconomic components that affect the Balance of payment of India. This review has an aim to give a brief view on the parameters chosen in the methods we have used without delving in detail about the reviewed literature. This research is based on empirical data where we put filters of using only the past 5 years of research papers of academic journal in nature.

We searched for research papers on

· Scopus

· Ebsco

· Emerald insight

From the start of 776 articles, the screening out process of duplicates and non-compliance with our research paper aim articles were excluded and finally 30 articles were arrived at. The methodologies used by the researchers are:

Ø Empirical method

Ø Quantitative methods such as survey etc.

Ø Qualitative methods such as interview etc.

The empirical method was used in 56.6 % of the total articles which were reviewed which was 17 out of 30 articles. After that, 8 research paper reviewed used the Qualitative method and paper used the Quantitative method. (Refer to Table 5)

Table 5: Methodologies used in literature review

Title	No. of Articles	Percentage
Empirical	17	56.7
Qualitative	8	26.6
Quantitative	5	16.6
Total	30	10

4. THEMATIC REVIEW:

The the matic review section aims to identify different themes which are based on the previous review literature. The themes are arrived on by looking at various research papers, studying their abstracts and then looking at the key terms or phrases that occur the most in the related research papers before reading the entire article in order to generate a list which would help in identifying the list of recurring themes. Three author shave read through various articles that were closely related to the theme and have used certain keywords with the help of which the number of articles could be narrowed down.

Table 6: Thematic review graph

Key words used for the theme

Macroeconomic factors ; Balance of Payments; Indian Economy; Current account deficit; Economic history; Globalization; Deregulation; FDI

As a result, (refer to table 6), Economics, econometrics and finance was found to be the top theme, followed by social sciences, the third theme that emerged in the ^{research papers was business}management and accounting and the last theme was arts and humanities.

4.1 Economics, Econometrics andFinance:

Economics,Econometrics and Finance was one of the top theme was found among the researchpapers (n=16). Under this article there were various factors affecting the BoPof India. There was a fall out of Foreign Direct Investment in the Current account and this was shown by the evidence from manufacturing sector. There was a preference for finished goods imports and intangible transaction payments were made. Such patterns rose serious concerns regarding the impact of FDI on current account balance of India’s BoP. (Verma.S. et al. 2015). Entrepreneurial impulse, investment behavior, and economic fluctuations are some other factors that affected the Balance of Payment of India as pointed out by various research papers.

Without banking operations there would be chaos inbalance of payments and economic imbalances would make a great unrecoverable hollow in the financial situation of the country. Monetary policy of a country helps in the financial scenario. (Sekhar, V.C, Apoorva, S.V. et al. 2017). “Export in India increased in the post-1990 liberalization periods was significant demand-side explanation, instead of a supplyside interpretation (Nell, K.S et al. 2013). Service sector in India is compared to a blackbox. Heterogeneous exercises like profitability enhancing innovation attributes, hindrances to passage for work, factor utilize, linkages with different segments and tradability in universal markets largely affect this segment (Nayyar.G,etal.^2013).^{There is also a misconception}among other countries that India is becoming a hub for number of operations. This is indeed the case of ^{1991 reforms
which lead the foreign}companies setup base in India. The growth analysis shows that although it is high, but it is only concentrated in feware as like the Pharmaceutical Industry (Mani.S. etal. 2010).”

The instability of Savings with respect to investment was negative at the onset of trade balance crisis in the 1990s and also the currency devaluation period after 2000 (Behera, S.R. etal. 2015). The risky BOP emergency in 1991 had genuine budgetary and financial shortage of the administration. India was nearly on the limit of bankruptcy for internationally made payment (Dongre, A.P, et al. 2012). The world economy was seeing a phenomenal fall in yield, exchange and work in 2008, which likewise included India. Be that as it may, the droop in India's financial development was more because of shortcoming in the intrinsic structure and monetary arranging and less because of outside variables (Giri,A.K, Sinha,B. etal. 2014).The exogenous factors that affected the Indian economy were strongly monitored by many economists and a ‘Tipping Point’ model was designed to study these factors. This factor compared two severe crisis of BOP India faced in 1991 and 1996. In 1996, Washington could not convince India to accept deregulation and globalization. On the otherhand, in 1991, Indian technocrats favored deregulation and globalization (Mukherji. R. et al. 2013). Numerous researchers have remarked on the constrained effect of the IT business in making occupations available to less-taught individuals and making a greater hole amongst Urban and Rural area (Barnes, T. et al. 2013). National money related disequilibrium does assume a vital part in short-run hold developments. Abundance cash request (Supply) instigates an inflow (surge) of international stores, which additionally suggests that the RBI tries to adjust the currency market disequilibrium (Mishra, R.K Sharma, et al. 2011).

The Subprime crisis of 2007-2008, the European debt crisis of 2009, Greece crisis of 2015, see-saw oil prices, Syrian conflict and unrest in Middle-East contribute heavily on growth aspects of a country like India which depends majorlyon FDI (Mishra. S, et al. 2016).

4.2 Social Sciences:

The second most topic that was found was sociologies (n=11) among the exploration papers. The execution in the current account balance of Balance of Payments of India stays as a political and disputable issue and consequently pulled in a ton of consideration this year.Empirical look into research propose that there is a huge long run balance connection between current-account shortfall and venture, reserve funds andopenness of the economy. "Because of the receptiveness of the economy, the currency record shortages ascended by 33% though Fiscal Deficit alongside reserve funds, yield hole, and genuine trade together impacted the present record by 35%. (Seshaiah, S.V, et al. 2014).

Trade balance emergency looked by India in 1991 is additionally discussed in many research papers. Parity of Payments emergencies brought about the taking off of neoliberal strategies, additionally alluded to as the New Economic Policy in India. The neoliberal strategies that took after, are results of unexpected recorded and topographical conditions as finished up by different research papers. IT industry additionally assumed a vital part in influencing the Balance of Payment of Indian economy and subsequently influencing India's monetary advancement. Some have featured its restricted effect firms in making occupations available to less-instructed individuals or the unassuming effect of industry yield on the vocations of individuals from poorer family units and groups (Barnes, T. et al. 2013)."

The economic fluctuations in investment can be explained in terms of movement of cyclical components and persistence. Growth cycle of private investments was found to be more volatile compared to public investments and GDP (Das, P. et al.2015). Twin deficits hypothesis findings confirm that budget deficit causes current account deficit in countries like Sri Lanka and Pakistan whereas for countries like India and Nepal, it is the other way round (Ravinthirakumaran, N., Selvanathan, S., Selvanathan, et al. 2016). The contingent reserve arrangement in BRICS imposes Balance of Payment constraints. IMF do the intervention just after 30% of the quota is borrowed (Bond, P et al. 2016).

4.3 Business, Management and Accounting:

Since the opening up of the economy post 1991 liberalization policies, India has been continuously attracting massive FDI. In recenty ears, India has also been an exporter of large volumes of FDI. Indian firm shave become more out ward to gain access to new technologies and skills. (Saikia, Det al. 2012). Banking systems can be compared to nervous system in human body. Without banking operations, there would be imbalances in Balance of Payments resulting in anun recoverable financial situation of the country (Shekhar,V.C, Apoorva, S.V.Getal.²⁰¹⁷⁾^.

4.4 Arts and Humanities:

1947 saw the British Government withdrawing a number of policies from India, Greece and Palestine. Economic constraints were one of the prime reasons to reduce overseas commitment. Due to the vast colonization, Britain had consequences interms of military over stretch, fall in international status and disruption in Balance of Payments (Asteris, Metal. 2013).

4.5 Earth and Planetary Sciences:

The new economic policy in India was a result of the BOP crisisin 1991.The neoliberal regime is a product of contingent historical and geographical conditions (Ahmed, W et al. 2014).

4.6 Engineering:

Special Economic Zones have been setup by our Government after “Liberalization and Globalization”to enhance foreign trade. Agriculture is also sawan improvement and Indian rupee was made fully convertible in 1993-94 (Sinha, P, Srivastava etal.2012).

4.7 EnvironmentalScience:

There is an inclination among scholarly and business groups that India is turning into a center point of developments. In this specific circumstance, there have been royal confirmations which demonstrate that development in advancements isn't across the board yet thought (Mani, S. et al. 2010).

4.8Multidisciplinary:

A number of publications show that, per capita energy consumption is low by 40%-50%, mainly because people donot have access to electricity and commercial fuels. To achieve a good standard in this context, such consumption hastorise substantially. Balance of Payments ensures energy security and promotes cost effective solutions (Desai, B.G et al. 2014).

5. LIMITATIONS:

· Due to the large number, we have limited the scope in the articles reviewed.

· More theoretical findings can replace the reviewed findings.

· Keywords like ‘Macro-economic factors” and “economy” used to search articles gave too many irrelevant articles on international history and economic events.

· We did not come across any recent article on the related topic. Hence our understanding is mostly based on articles from 2001-2006.

6. SCOPE FOR FUTURE RESEARCH:

Suggestions for the future research can be more quantitative results and experiments to support the relationship established. The research can be more extensively conducted by using new econometric methods to present a more novice model for further studies. More articles can be included in the literature review as there are several components under this paper which can be studied independently.

7. CONCLUSION:

Balance of payments (BOP) is a statement showing statistical data which systematically summarizes, within the time specified, the monetary exchanges of an economy with rest of the world. Keeping in mind the end goal to build up the monetary condition of a nation, trade balance assumes an imperative part. It can likewise be utilized to assess nation's execution in the globally sorted out monetary rivalry. While deciding the trade balance of a nation, the way in which the expansion and lessening influence the same is observed. For bookkeeping any nation's aggregate payments made amid the particular time frame, BOP which is a built up technique is utilized and furthermore the receipts gathered from some other nation and from private area or government trade sources.

To comment on the relationship of BOP with the other factors, the rate of Inflation, Exchange rate, GDP, Current account, Capital Account have a positive relationship with Balance of Payment. On the other hand, Money supply which is the potential measure to ensure economic variables stability, thereby contributing to the economic growth is sharing negative relationship with BOP. The capital account which includes the net change in responsibility for resources alongside the loans and investment between the nation and rest of the world have affected the BOP more than the Current account, which demonstrates the net sum a nation is gaining in the event that it is in overflow, or spending on the off chance that it is in deficiency.

Macroeconomic policies are important to be used in developing nations in order to monitor the trade payments to keep the Indian market attractive for the foreign inflows.

8. REFERENCES:

1. Ahmed, W. (2014). The political economy and geopolitical context of India’s economic crisis, 1990-1991. Singapore Journal of Tropical Geography, 35(2), pp. 179-196.

2. Asteris, M. (2013.). British overseas military commitments 1945-47: making painful choices. Contemporary British History, 27(3), pp. 348-371.

3. Barnes, T. (2013). The IT industry and economic development in India: A critical study. Journal of South Asian Development, 8(1), pp. 61-83 .

4. Behera, S. R. (2015). International capital mobility and saving investment relationship in India. Economics Bulletin, 35(1), pp. 430-440.

5. Bond.P. (2016). BRICS banking and the debate over Sub-Imperialism. Third World Quarterly, 37(4), pp. 611-629 .

6. Das, P. (2015). Entrepreneurial impulse, investment behavior, and economic fluctuations- A A VAR analysis with Indian data. Asian Development Review, 32(2), pp. 1-17.

7. Desai, B. (2014). Energy in India and the world: 2012-13. Current Science, 106(1), pp. 31-34 .

8. Dongre, A. P. (2012). Policy changes in the wake of Globalization and its impact on Indian industries. Journal of Policy Modeling, 34(3), pp. 476-496.

9. Garg, B. P. (2015). Casual relationships between the capital account and the current account: an empiriacal investigation from India”. Applied Economics Letters, 22(6), pp. 446-450.

10. Giri, A. K. (2014). India’s economy amidst the Global economic crisis. International Journal of Economics and Business Research, 8(2), pp. 205-226.

11. Mani, S. (2010). Are innovations on the rise in India since the onset of reforms of 1991? Analysis of its evidence and some disquieting features. International Journal of Technology and Globalisation, 5(1-2), pp. 5-42.

12. Mani, S. (2010. ). Are innovations on the rise in India since the onset of reforms of 1991? Analysis of its evidence and some disquieting features”.

13. Mishra, R. K. (2011). “India’s demand for International Reserve and monetary Disequilibrium: Reserve adequacy under floating regime. Journal of Policy Modeling, 33(6), pp. 901-919.

14. Mishra, S. (2013). . “Macroeconomic factors and FDI in India: A Toda, Yamamoto causality approach”.

15. Mukherji, R. (2013). Ideas, Interests and the Tipping point: economic change in India. Review of International Political Economy, 20(2), pp. 363-389.

16. Nayyar, G. (2013). Inside the black box of servies:evidence from India. Cambridge Journal of Economics, 37(1), pp. 143-170.

17. Sekhar, V. A. (2017). A case study on bank rate variations in India and United States of America.

18. Seshaiah, S. (2014). On the estimation of the determinants of the current account deficits : A case of Indian economy. Applied Econometrics and International Development, 14(1), pp. 203-214.

19. Sinha, P. S. (2012). “Liberalization and Globalization in India”. International Journal of Applied Engineering Research, 7(11 SUPPL.), pp. 1771-1776.

20. Verma, S. (2015). Current account fall-out of FDI in post reform India: evidence from manufacturing sector”. Economic and Political Weekly, 50(39), pp. 45-53.

Received on 12.10.2017 Modified on 11.11.2017

Asian Journal of Management. 2018; 9(1):847-852.

DOI: 10.5958/2321-5763.2018.00134.8

Database	Scope and Search criteria	Date of Search	No. of items
EBSCO	Search: Abstract, Academic Journal Scholarly articles: Scholarly (peer-reviewed) journals Document type: article. Language: English	26-Jul-17	216
Scopus	Search: Abstract, Academic Journal Scholarly articles: Scholarly (peer-reviewed) journals Document type: article. Language: English	25-Jul-17	560

S.No	Author's Name and Year	Area Covered	Findings	Learnings/ Gap Analysis
1	Kaur and Sharma (2013)	Macroeconomic Determinants of Balance of Payment in India	Confirms that the rate of exchange, trade balance, industrial produce, rate of inflation and GDP have an impact on BOP in Indian scenario.”	They presumed that trade balance is altogether influenced by all the previously mentioned parameters however for conversion rate for which the effect ended up being statistical inconsequential. The administration needs to decrease target expansion and address the outside debt issue.
2	Shafi, Hua, Idrees and Nazeer (2015)	Impact of exchange rate, inflation and interest rate on Balance of Payment	Investigates the fluctuation in three significant rates of any economy i.e. inflation rate, foreign exchange rate and interest on BOP in the paper	Results showed that inflation and foreign exchange rate has positive effect while interest rate have negative effect on BOP in India.
3	Mathew (2013)	The trend analysis of Indian balance of payment	Decline in gold imports	India narrowed down the current account deficit through decline in gold imports. It increased the GDP by 1.2% in the year 2013-14.
4	Bhatia and Yadav (2013)	Study of Balance of payment in Indian perspective	Discusses the theoretical background on why India is facing current account deficit	It discusses those external and internal factors that affect the flow of financial resources which is used to cover the difference between Capital and Current account.