SSC
INDIAN ECONOMY
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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Widening gap between imports and export
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Difference between savings and investments
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Widening gap between government expenditure and revenue
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Difference between aggregate demand and aggregate supply
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Detailed explanation-1: -Provisional data on the index of industrial production show na increase of 8.4 per cent during 1990-91 compared to 8.6 per cent during 1989-90. On the basis of these tentative estimates, real GDP growth in 1990-91 may be expected to be in the range of 5 per cent.
Detailed explanation-2: -India had to secure an emergency loan of $ 2.2 billion from the International Monetary Fund by pledging 67 tonnes of Gold as collateral security. In May 1991, India sent 20 tonnes of Gold to Union Bank of Switzerland, Zurich and in July, 47 tonnes of Gold was given to Bank of England to raise a total of $ 600 million.
Detailed explanation-3: -It is widely believed that India’s Balance of Payments crisis (BOP crisis) in 1991 was caused by an unsustainable growth rate, excessive public sector deficits, and heavily controlled capital account that led to foreign exchange reserves drying up and ultimately forced India to go to the IMF for a bailout package.