Question

Role of oil in the bop crisis of indian economy that occured during 1991

Answer 1

Answer:

The crisis was caused by currency devaluation; the current account deficit, and investor confidence played significant role in the sharp exchange rate depreciation. The economic crisis was primarily due to the large and growing fiscal imbalances over the 1980s.

Answer 2

Explanation:

Precipitated by the Gulf War, India's oil import bill swelled, exports slumped, credit dried up, and investors took their money out. Large fiscal deficits, over time, had a spillover effect on the trade deficit culminating in an external payments crisis. By the end of the 1980s, India was in serious economic trouble.