GENERAL KNOWLEDGE

Detailed explanation-1: -The 1966 devaluation was the result of the first major financial crisis the government faced. As in 1991, there was significant downward pressure on the value of the rupee from the international market and India was faced with depleting foreign reserves that necessitated devaluation.

Detailed explanation-2: -India devalued its currency on 6th June, 1966 as independent India faced its first balance of payment crisis. India was dependent on economic aid from rich countries, exports from India were very poor, there was not much encouragement for foreign investments, and India was facing a huge trade deficit.

Detailed explanation-3: -The rupee was devalued by 36.5% in 1966 on weak macro-economic indicators. Mid-sixties was a period of severe economic and political stress. The monsoon had failed in 1965 and 1966 but revived well in 1967. Food grains production declined from 89 million tonnes in 1964–65 to 72 million tonnes in 1965–66.