RADICAL RAO AND MACHO MANMOHAN | JUNE 1991

It might seem at first glance that conditions are not favourable for drastic change. We have a hung Parliament of Congress is well short of a majority and will fall even short after the elections to 13 counter mended seats of which it may win no more than three. It depends for its existence on the support of the National Front Left combine which is opposed in principle to many reforms that open up the economy or tackle organised labour. The minority government seems very unlikely to last a full term and may indeed last much longer than the Y.P. Singh Government did.

More to the point that the government officer are empty. Foreign creditors have decided that they do not want to land more in India until its reforms itself, and this proves that it will be able to repay its new loans. India will have to depend on the International Fund for Finance for the next few years, and IMF assistance will not be available without much greater fiscal discipline. Industrial and Trade reforms, and the changes in the banking sector.

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