THE BOP CRISIS OF 1991 DIVIDED INTO 3 STAGES 1. PRELUDE 2. THE CRISIS 3. ECONOMIC REFORMS

1. Phases of India’s BoP
The devaluation of 1966
The first and second oil crisis
External payments crisis of 1991
the East Asian crisis of 1997
The Y2K event of 2000
The global financial crisis of 2008

2. External payments crisis of 1991
Prelude to the crisis
The crisis
Response to the crisis-
comprehensive
reforms

3. FISCAL PROFLIGACY HIGH CURRENT ACCOUNT DEFICIT
HIGHLY CONTROLLED FDI & FPI BORROWING & DEBT
MACRO ECONOMIC
IMBALANCE
Break up of
Soviet
Union
Iraq- Kuwait
war
EXTERNAL
Political
uncertainty
Lack of
confidence
INTERNAL
PRELUDE TO THE CRISIS

4. FISCAL SITUATION

5. SOURCE: Perspectives on India’s Balance of Payments; Deepak Mohanty

6. 3. HIGHLY CONTROLLED
FDI & FPI
4. BORROWING & DEBT

7. THE CRISIS

8. RESPONSE TO THE CRISIS-
COMPREHENSIVE REFORMS