ABSTRACT

This chapter aims to draw the attention of the distinguished gathering to a few problems which India in particular, and the developing countries in general, are facing in the area of foreign debt and international trade. India has a creditable record in using the borrowed resources very efficiently. The rate of return on International Development Association fund projects in India has been quite high. It is also common knowledge that India's credit rating is quite high. The foreign exchange cost of our liberalisation policy is already causing a good deal of anxiety in India. India faces gigantic tasks. The pressures on our foreign exchange position are building up due to the debt-service obligations in respect of the past debts, compounded by the repayment obligations in respect of IMF loans. The external borrowing programme projected in the current Seventh Plan is of an order that will maintain future debt service obligations within manageable limits.