Indian Economy

May I now say a word or two about the situation in my country in the context of world economic situation ? Twelve months ago, the world economy was in a situation of grave crisis characterized by enormous payment deficits, galloping inflation and a disturbing recession. The impact of these adverse developments on developing countries was very severe and affected them in many different ways. India too suffered in the process and is still feeling the adverse consequences of these developments. But we in India had to adopt certain tough monetary, fiscal and income policy measures. As a result, the overall price index has been steadily declining since October 1974. India happens to be one of the few countries where the price level today is lower than what it was 12 months ago.

But the prices of most manufactured goods that we import continue to rise, reflecting the inflationary situation in the developed countries. Our import bill for energy has multiplied three-fold since 1972, and the prices of our imports have increased by about 60 per cent during the last year. Nearly 80 per cent of our export earnings are spent on food, fertilizers and fuel. There has been no corresponding increase in export earnings from tea, jute, tobacco and iron ore. We have taken several steps to deal with this critical situation. Among them are a more rational and economic use of oil, the maximization of fertilizer production, and an increasing use of coal-based technology.

In our development plans we have assigned a high priority to measures for bringing about a more equitable distribution of essential goods, the expansion of education facilities, improved standards for health and nutrition, and greater involvement of women and youth in our development processes. The situation facing India concerns the future of over 560 million people. Although tremendous efforts are being made on a national scale to solve their problems, international co-operation and assistance in certain spheres will be vital for the attainment of our development goals.

I have just come from Lima after attending the conference of the Foreign Ministers of non-aligned States, which was attended by 107 delegations, including liberation movements. Together they represent the majority of sovereign nation States in the United Nations. Their united voice reflects the aspirations of the majority of the sovereign nation states in the United Nations. Their problems are immense and have a common historical origin in exploitation in the past by the former colonial powers. They are seeking justice, the redress of past wrongs and an honest basis for co-operation in the future.

On the one hand, they are willing to develop self-reliance and co-operation among themselves; on the other, they are searching for ways and means of obtaining assistance from developed countries that would enable them to guarantee for their peoples food, water, health, housing, education, and, above all steady economic growth as well as freedom and security in an interdependent community founded on the sovereign equality of nations.