NEW DELHI :The shadow cast by the Gulf crisis on the Indian economy would lead to a price rise of 12 to 13% in the current year itself, according to an eminent economist, Malcolm S. Adiseshiah.
In his midyear review of the economy 1990-91 to be presented at a one day workshop on November 19 here, Adiseshian said the balance of payments would worsen by three billion dollars as z result of the Gulf crisis, even assuming that the spot price of crude would average 25 dollars per barrel. Crude oil import bill alone would increase by a massive Rs. 42 billion, the loss of exports by another Rs 3.6 billion and loss in remittances and deposits from Indian workers from Kuwait and Iraq would be Rs four billion.
According to Adisehshiah’s estimates, estimated loss of contracts and work by Indian firms is around Rs four billion.
Though the immediate effect of the gulf crisis would get absorbed by the tight money policy postulated by the RBI, Adeiseshiah felt that the hike in oil prices of primary articles.
Article extracted from this publication >> November 16, 1990
