India, a country which is now considered as a stable one in the list of indebted countries. The economic conditions of India was not very well maintained or progressive even in the recent past years. India has struggled a long way and played smart cards to build its economy and came over the financial upsets it faced in its relatively early years. India and IMF have got a history in giving loan and financial support thing at two major economic crisis faced by India. That was in the years 1981-1982 and after that in 1991-1993.
India Giving An Eye to IMF
India has been consistently avoiding any situation where it would need a loan from International Monetary Fund. It has somehow succeeded in tackling the policies of IMF by changing its directions towards India’s own interests and profits. But IMF being one of the powerful bodies belonging to the super power of the world is still making India’s citizens owe a debt out of their spending from GDP.
“India has enough foreign exchange reserves, so the question of having to turn to the IMF is not there.”
Said the world bank chief economist Kaushik Basu.
How Much Debt Each Citizen Owes to IMF?
There were two occasions which are still remembered when India was terribly in a need to take support from IMF in form of loans. The last when it faced such situation was the economic crisis of 1993 when IMF urgently paid India’s dues. But India was successful in paying all the revenue estimated to $30 million debt in the year 1999. That was the last upholding between IMF and India.
“In some countries, even though aggregate measures are not excessive, a large share of corporate debt is concentrated in only a few, highly leveraged firms. The distribution of leverage does matter and Asia clearly has ‘pockets’ of highly leveraged firms—including in China, Japan, India, and Korea—that may pose a risk to macroeconomic stability,” IMF said in its Asia Pacific Economic Outlook.
As of 2014, India’s debt had matured to an estimated $172 billion which clearly meant that the country needed to pay back $172 billion of debt by March, 2014.
According to a report of 2015, IMF cut its prediction for growth in India’s gross domestic product by 0.2 percentage point to 7.3% for the year ending March 31, 2016, but left its forecast of 7.5% for the following 12 months unchanged from its most-recent update in July.
India and IMF Tied For Technical Assistance
Although India has made its position clear from paying debts back to IMF and come out of its dominance, but the technical assistance that IMF provided India in recent past years can also not be neglected. Since 1981 the IMF Institute has provided training to Indian officials in national accounts, tax administration, balance of payments compilation, monetary policy, and other areas.
It takes country to follow the demands and claims by IMF like privatization in almost every field resulting in making inconveniences for the Indian citizens.
About Nida Zaidi
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