ISSN (Print) - 0012-9976 | ISSN (Online) - 2349-8846

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India s Balance of Payment Prospects

India's Balance of Payment Prospects S Kumarasundaram FOR a developing country with a slow growing export sector and a sizeable accumulation of foreign debt, India has not faced many crisis situations in its balance of payments. Some of the explanations ready at hand are: a regime of import and foreign exchange controls inherited from World War II, industrial licensing and other economic controls which acted as a steady restraining influence on investment expenditures and indirectly on imports, and availability of concessional financial assistance from abroad which kept the debt-service costs at a manageable level. But not widely known arc the patches of good luck that India had been favoured with during certain critical payments periods in the past. Currently India seems to be in for another spell of luck as its payments position is about to enter a difficult phase. We refer here to the recent softening of oil prices, which promises a saving in India's import bill to the extent of about Rs 1,000 crore during the next 12 months. Circumstances surrounding India's balance of payments are perhaps undergoing drastic changes, and beyond the current phase which may not prove difficult, the country faces challenging tasks ahead.

THE ECONOMY- Economic Controls and the Financial System

THE ECONOMY Economic Controls and the Financial System S Kumarasundaram THE Narasimham Committee which is presently examining the feasibility of substituting physical controls over the economy by a system of financial controls by the Indian banking and financial institutions has a delicate responsibility assigned to it. Its areas of inquiry can extend to all the physical controls installed (or augmented) during the past three decades of planning. How else can the Committee identify their substitu ability by financial controls? The subject matters of its inquiry are of such importance that its deliberations are likely to attract more than ordinary interest. Though it may not be readily apparent, the Committee's recommendations will have implications beyond the realm of economics and economic planning. A debate on these issues has begun and will continue. This note is one contribution to the debate. Some of the wider issues raised by the Committee's terms of reference are commented upon first.

THE ECONOMY- India s Balance of Payments, 1983-84

THE ECONOMY India's Balance of Payments, 1983-84 S Kumarasundaram THE ECONOMIC SURVEY of the Government of India for 1983-84 and the Budget Speech of the Finance Minister both make significant claims about the turn-round in the country's balance of payments. The Economic Survey is replete with these references, taking pains to emphasise that the government's management of the policy measures in this sphere has paid dividends in 1983-84, The decision to surrender nearly SDR 1.1 billion of the International Monetary Fund (IMF) facility has been held out as a confirmation of the results obtained.

Corporate Takeovers The Indian Situation

S Kumarasundaram The past few weeks have seen much hectic trading in the shares of Escorts and DCM, reflecting purchases of shares of these companies by non-resident Indians as also defensive operations by their present managements. While the threat of takeover of these two companies has receded, the issues raised by the Escorts-DCM episode transcend the immediate circumstances surrounding the attempted take- over.

EQUIPMENT LEASING- Complementary Role in Financing of Industry

on the other hand expanded at a much slower pace (Rs ,841 crore compared with Rs 1,388 crore) despite the relaxations effected in credit policies in June 1982. These trends are reflective of the .sharp change, within three months, from a situation of liquidity stringency and unsatisfied demand for credit to one of excess liquidity in the banking system caused by slackness in demand for credit.

The Indian Financial System-Its Deficiencies and Some Remedies

Its Deficiencies and Some Remedies S Kumarasundaram In a mixed economy functioning under a democratic framework the Financial System has a responsible and supportive role to play. This paper doss not propose a recasting of the existing system. It only proposes a strengthening of its foundations so that it can continue to perform its developmental role and remain a valuable aid to government in its developmental tasks.

Reserve Bank Support for Exchange Parity-A Case for Reconsidering Present Arrangements

A Case for Reconsidering Present Arrangements S Kumarasundaram In exercise of one of its principal functions, the Reserve Bank of India has since its inception been offering a system of support for the Indian exchange rate. It is this day to day support which ensures orderly conditions in the Indian exchange market and permits satisfactory conduct of the country's international transactions.

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