raman@cs.cornell.edu (T. V. Raman) (03/23/91)
India is in deep financial trouble and foreign exchange reserves are running extremely low. The government has taken the unprecedented move of approaching three major donor nations, the U.S., Germany, and Japan directly. This is unusual in that such approaches are usually made within the framework of the IMF. According to the BBC's Mark Tuly, this reflects the gravity of the situation. The government is in no position to take decisions about long term loans and it will be up to the elected government that replaces the current caretaker government led by Mr. Chandrashekar to decide upon any long term loans. This of course will happen only after June, when the new budget will also have to be presented. If the help that the government is seeking is not forthcoming, the Indian government is expected to face severe problems in the repayment of loans for the first time in its history and may have to resort to some kind of debt rescheduling. --Raman Source: BBC -- ----------------------------------------------------------------------------- Edited by Surekha Reddy Gaddam. Please send your news articles relevant to S.Asia to gaddam@remus.rutgers.edu. Other than news will not be posted. -----------------------------------------------------------------------------