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.
