SECTION - 1
ECONOMIC AND FISCAL POLICY
EDITORIAL NOTE
When Y. B. Chavan assumed office of the Finance Minister in June 1970, there were already strong inflationary pressures leading to high level of price rise. The situation further aggravated during the next two years because of failure of monsoon for three successive years and acute drought spread over large part of the country.
The economic situation further deteriorated because of the tremendous financial burden that the Government of India had to bear to provide relief to over one million refugees from across the East Pakistan (now Bangla Desh) into West Bengal.
There were acute shortages of essential commodities especially foodgrains and pulses as well as cooking oil. The Indian economy was already straining under the burden when suddenly, the Petroleum Producing Countries formed a cartel and raised a price of crude oil. Imports became costlier and the Government of India faced a critical situation because of foreign exchange burden.
Four speeches included in this Section bring out Y. B. Chavan’s own perception of the Indian economy fiscal situation and issues connected therewith. These also elaborate the various measures taken by the Finance Minister to deal with the difficult economic situation.
