Journey Of Indian Rupee Since Independence In 1947
When British left India Indian economy was very poor it was paralyzed and in begging state. Under the leadership of first prime minister of India a five year plan was formulated to address problem of “Poverty”, “Foreign Trade”, “Necessity of fast industrialization”, “Increase in population”, “Growth and improvement of natural resources”, “capital insufficiency”. But to realize above targeted goals money was required and hence Indian government continuously borrowed foreign money in form of outside borrowings or loan and it increased in huge magnitude at the end of 1960s.
India was facing budget deficit and could not borrow more due negative rate of savings. Due to this Indian rupee was devaluated. Before 1966 1 US $ was equal to 4 Indian rupee but in 1966 devaluation was supported by two major factors, the first one being Indo china war in 1962 and indo Pakistan war of 1965. Second factor was the due to increase in inflation which was the result of draught faced by India in 1965-1966. From 1970s till 1980s us dollar kept on becoming more powerful against Indian rupee because of numerous reasons. Mainly powerlessness of Indian government to infuse an impetus of hearty development in the Indian economy. Because of inadequacy in balancing out genial business connection with us which was combined with vigorous and durable financial advancement of us. Up till now India was dependent significantly on Soviet Union for exports. Soviet Union was isolated into 15 little countries in 1991 at that point India’s exports were down extensively. India was also reliant on west Asia for oil imports, South Africa for gold, US for innovation and south-east Asia for vegetable oil and so forth.
Furthermore to purchase these things worldwide exchange cash was us dollar and the main arrangement of procuring dollars is by sending out satisfactory measure of good on the planet showcase. till 1970s the swapping scale was 1 us dollar 7. 47 inr which went up by 1 USD 8. 41 inr in 1975 after the political precariousness because of death of then prime minister Mrs. Indira Gandhi in 1984.
