Question

IV. Read the following passage and answer the following questions
(2)
During this period, Indian economy was in crisis situation. Before the P V Narsimha
Rao government took charge. Chandra shekhar was the Prime minister. During his tenure
the rate of inflation was 17%.
Economic rate had gone down by 1.1% India had foreign exchange reserves
to last for import for a week. It had become difficult to pay back its loan and even give back its
interest on it. In May 1991, the government had tried to control the situation by seeling some
of its gold reserves and by mortgaging some. Before the Chandra Shekhar government, the
V.P. Singh government had incurred a liability of over 10 thousand crore rupees on the
economy by waving of the loans of all farmers.
Questions:
1. How did the V.P. Singh government burden the Indian economy?
2. What was the reason to mortgage the gold reserves by the Chandra Shekhar
government with the world bank?​

Answer 1

1. The V.P. Singh government had incurred a liability of over 10 thousand crore rupees on the

economy by waving of the loans of all farmers.

2. The World Bank and IMF also stopped their assistance , leaving the government with no option except to mortgage the country's gold to avoid defaulting on facts.

I hope it help you...