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Showing posts from September, 2012

Injustice and Gap

In the year 1991, India's foreign reserves, key to pay for our import bills comprising petroleum and other important items, dropped to such levels that not sufficient to last beyond 15 days. Reasons: Mammoth expenditure on development programmes which did not generate additional revenue. Taxation was not sufficient to support vast spending. Income from public sector undertaking was too small to meet growing demands. Corruption and inefficient machinery.

India started borrowing money from international moneylenders to meet country's demands and by 1991, our economy was so rickety that that India was not able to pay for the interest that were to be paid to international money lenders. No other country was ready to lend to India. prices rose sharply.

Under such circumstances, India approached World Bank and IMF. Against the 7 billion $ that India got to manage the crisis; world bank wanted India to liberalize and open her market for private sector. India agreed and we got reform…