Fixed capital is assets used in the productive process. Examples of Fixed Capital Formation include – Building or expanding existing factory, Road and bridge construction, Purchase of transport equipment, Office equipment, such as computers, printers, Machinery used in the productive process, Energy infrastructure etc.
Generally, the higher the capital formation of an economy, the faster an economy can grow its aggregate income. Increasing an economy’s capital stock also increases its capacity for production, which means an economy can produce more. Producing more goods and services can lead to an increase in national income levels.
Fixed capital formation (growth of productive infrastructure etc.) is directly related with economic growth rate.
Only short-term growth may be achieved if resources from Fixed Capital are diverted towards consumption. In the long-term quality and quantity of infrastructure is a major determinant of economic growth.
Dwellings are not directly utilised by businesses and the government to produce output. Since dwellings do not add to the productive capacity of the economy, even if its growth rate reduces, the economy can still grow.

The BSA is a very good example of mutual cooperation between India and Japan for strategic objective of assisting each other in times of difficulty and for restoring international confidence. This facility will enable the agreed amount of Capital being available to India on tap for use. Also, with this arrangement in place, prospects of Indian companies would improve in tapping foreign capital as there would be greater confidence in stability of country’s exchange rate. Availability of such swap line to tide over difficulties arising out of Balance of Payment (BOP) would deter speculative attacks on the domestic currency and greatly enhance the RBI’s ability to manage exchange rate volatility

‘Import Substitution’ (IS) generally refers to policy that eliminates the importation of the commodity and allows for the production in the domestic market. The objective of this policy is to bring about structural changes in the economy.
Import cover is the number of months of imports that could be covered for by a country’s international reserves. Import cover is an important indicator of the stability of a currency.

Exit policy means the policy regarding the retrenchment of the surplus labour force resulting from restructuring of industrial units and workers displaced by the closure of sick units. Exit may become necessary due to strategic reasons, financial constraints and environmental changes.

Stagflation is an economic scenario where an economy faces both high inflation and low growth (and high unemployment) at the same time.
The conventional view among economists is that there is an inverse relationship between economic growth and inflation. The idea was first proposed by New Zealand economist William Phillips, after whom the “Phillips Curve” is named, based on statistical studies of inflation and unemployment.