Prime Ministers: Lal Bahadur Shastri, Gulzarilal Nanda, Indira Gandhi
Partition, planning, aid consortia and nationalised banks.
Bank Rate
6%
unchanged on 1965
Rupee per dollar
₹6.36
+33.6% on 1965
Inflation
10.8%
+1.33 pts on 1965
GDP growth
-0.06%
+2.58 pts on 1965
Reserves
$610m
+1.5% on 1965
Arabian Light
$1.8
unchanged on 1965
FX (INR/USD) · 6 June 1966
INR 4.76 → 7.50 per USD (57.5% rise in the rupee price of USD; −36.5% gold parity)
Pushed by the World Bank (Bell Mission) and the US in exchange for resumed aid; widely seen at home as imposed from outside; Mrs Gandhi's government; FM Sachindra Chaudhuri
ReportedOfficial record. Source: IMF par-value records; Bell Mission report
FX · 6 June 1966
36.5% devaluation (Rs 4.76 → 7.50 per USD)
Consortium promised USD 900 mn a year of non-project aid; received 295 (1967-68) and 642 (1968-69)
ReportedOfficial record. Source: FRUS 1964-68 v25 d349; Srinivas lecture
Devaluation of 1966-06-06: par value from Rs 4.76 to Rs 7.50 per USD (-36.5 per cent in foreign-currency terms; +57.5 per cent in rupee terms)
Pressed as a condition by the World Bank (Woods/Bell) and the US government, tied to the Consortium's USD 900 mn a year non-project aid. Approved by the IMF. UK involvement was only through the Consortium (no direct UK document found). Came with abolition of export subsidies and import entitlements, new export duties (jute goods, tea and others) and import-duty cuts.
ReportedOfficial record. Source: IMF 1966–71 history ch. 23; FRUS 1964–68 vol IX doc 66; the1991project.com
June 1966 import policy: liberalised import licensing for 59 priority industries
Actual-user licences for components and raw materials to run at full capacity, financed by Consortium non-project aid
ReportedPeer-reviewed. Source: Bhagwati & Srinivasan (NBER 1975)
Re-introduction of export subsidies ("cash assistance") (Aug 1966)
ReportedHeterodox institution. Source: the1991project.com timeline
Rupee devaluation and import liberalisation package
Import licensing was eased for 59 priority industries and export subsidies were cut. The package was pushed by the World Bank (Bell mission) and the US; London played no significant role. It was largely reversed in 1967-68 after two droughts and aid pledges that were not fully disbursed. Background row for this decade.
ReportedPeer-reviewed. Source: Bhagwati & Srinivasan (1975), Foreign Trade Regimes and Economic Development: India, NBER
shipping (state-guaranteed loans)
Teja left India in 1966, was later extradited from the UK and convicted (1972). The loan figure is from secondary press accounts and not checked against the parliamentary record.
UnconfirmedPress. Source: secondary press summaries
| Creditor | Instrument | Amount | US$ m | Status | Grade |
|---|---|---|---|---|---|
| IMF | GRA purchase outside any stand-by, Mar 1966 ("Other" column of AR 1966 Table 50) | 187.5 USD | 187.5 | repaid by FY1970-71 | verified |
| IMF | Gold-tranche purchase linked to the quota increase from 600 to 750 | 37.5 USD | 37.5 | estimated | |
| Aid India Consortium | Non-project aid target (plus ~300 project aid) tied to the 1966-06-06 devaluation (36.5%) and the Bell Mission conditions | 900 | pledges not fully met: 295 received 1967-68, 642 in 1968-69 | reported | |
| IBRD | Cumulative loans to India (34 loans) | 971.9 USD | 971.9 | amortising | verified |
| IDA | Cumulative credits to India (19 credits) | 675.5 USD | 675.5 | amortising | verified |
| International Monetary Fund | Drawing outside a stand-by arrangement (March 1966 per IMF F&D; "April 1966" per the IMF 1966–71 history) | 187.5 USD | 187.5 | Repurchased (dates not found) | reported |
| Aid-India Consortium (World Bank-chaired) | Non-project aid pledge tied to the devaluation/liberalisation package | 900 USD | 900 | First tranche arrived late (Nov 1966). Later rounds were cut to about USD 600 mn; the May 1968 figure was about USD 642 mn. | reported |
| United States (PL-480) | Emergency food aid 1966 (Congressional joint resolution backing about 3.5 mn tonnes; total 1966 PL-480 grain about 10 mn tonnes) | Delivered, with monthly-release delays | reported |
Rows are listed as recorded. Some describe the same loan from different sources and must not be added together.
