The Indian economy, which is passing through a transitional period, has come out from the crisis of 1990-91 which was the result of a high inflation rate of 17 per cent
A high fiscal deficit of 44,632 crores, and a trade deficit of 10.645 crores.
That was the time when the second most powerful country of the world - the U.S.S.R.-had disintegrated and 15 newly independent nations had emerged out of it:
the forces of the U.S.A., U.K., France and Saudi Arab were in confrontation with Iraq to teach her a lesson because she had dared to capture Kuwait unlawfully.
The condition of the Indian economy was so poor that the Reserve Bank of India had to mortgage 47.5 metric tons of gold with the Bank of England to obtain the required foreign exchange to meet the requirements of import liabilities.