14.
Search for New Ways A major policy change was announced in Parliament on 24 July 1991 by then Prime Minister P.V. Narasimha Rao and Finance Minister Manmohan Singh. The new policy was a significant departure from the earlier socialistic pattern of development. In a way, the process towards that shift had started gradually in the days of Rajiv Gandhi. But due to huge resistance to such a change he had to proceed rather haltingly. But this time a major financial crisis had emerged and the Government had no choice but to make those changes. The foreign exchange reserves of the country had reached rock-bottom. There was barely enough to last for two weeks and after that all imports, including of essential items like petrol, would have stopped. That would have resulted in total chaos. Just a week before, around 17 July, Government had sent two special planes to Europe with most of the gold reserves held by the Reserve Bank. Twenty tons were mortgaged with Union Bank of Switzerland and 47 tons with Bank of England as security for further loan. The loan received against it was quite insufficient but there was no more gold left with the RBI against which additional loan could be secured. Indian Government was desperately seeking some emergency assistance from the World Bank and other international agencies. They were willing but only on the condition that Indian Government implemented some basic economic changes they had stipulated. The Government of India had no choice but to accept those changes. Those changes are 284
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Sharad Joshi : Leading Farmers to the Centre Stage
