forex reserves · 17 February 1965
Reserves at lowest point since independence
Came before the March 1965 IMF SBA (SDR 200 mn)
ReportedHeterodox institution. Source: the1991project.com
Prime Minister: Lal Bahadur Shastri
The Age Of Stars
Partition, planning, aid consortia and nationalised banks.
Vol. XCIThe edition of 1965 · The Planned Republic13 records
- Prime Minister
- Lal Bahadur Shastri
- President
- Sarvepalli Radhakrishnan
- Finance Minister
- T. T. Krishnamachari
- RBI Governor
- P. C. Bhattacharya
Bank Rate
6%
+1 pts on 1964
Rupee per dollar
₹4.76
unchanged on 1964
Inflation
9.47%
−3.88 pts on 1964
GDP growth
-2.64%
−10.09 pts on 1964
Reserves
$601m
+20.4% on 1964
Arabian Light
$1.8
unchanged on 1964
Markets & Money
1 itemaid flows / food · 1 September 1965
Indo-Pak war; US/UK aid suspension
Start of the PL-480 "short tether"
ReportedOfficial record. Source: FRUS 1964–68 vol XXV
Trade & Tariffs
2 itemsImport surcharges / regulatory duties, and extended export-promotion schemes (TTK budgets 1965)
Tariff-based squeeze and more subsidies in place of devaluation, which TTK publicly rejected on 1965-07-17
ReportedHeterodox institution. Source: the1991project.com
Freeman–Subramaniam agreement (Rome, late 1965)
India commits to the HYV "new agricultural strategy" and fertiliser investment (including foreign private…
India commits to the HYV "new agricultural strategy" and fertiliser investment (including foreign private capital in fertilisers) as the price of continued PL-480 supply
ReportedOfficial record. Source: FRUS 1964–68 vol XXV
War & Unrest
4 itemsSoutheast Asia
Vietnam War escalation
Indirect: Johnson linked PL-480 grain releases to India easing its criticism of US Vietnam policy (State Dept history).
VerifiedOfficial record. Source: history.state.gov PL-480 milestone
South Asia
Second India–Pakistan war; Tashkent Declaration 1966-01-10
US suspended military and economic aid to both sides (Sept 1965); PL-480 food aid put on a short tether; together with the 1965–66 droughts this set up the 1966 devaluation (see FLASHPOINT). The London war-risk market put India and Pakistan in additional-premium areas
ReportedOfficial record. Source: FRUS 1964–68 vol. XXV; World Bank Bell Mission report 1965
Kashmir / Punjab
Indo-Pakistan War (Aug to 1965-09-23 ceasefire); Tashkent Declaration 1966-01-10
US and UK suspended military, and slowed economic, aid to both sides. The Consortium effectively paused. The PL-480 "short tether" began. Worsened the 1965–66 reserve crisis and set up the devaluation.
ReportedOfficial record. Source: the1991project.com; fiftytwo.in; FRUS 1964–68 vol XXV
Southeast Asia
Vietnam War
US fiscal and monetary strain behind the 1971 Nixon shock. India chaired the International Control Commission (ICC).
ReportedOfficial record. Source: FRUS
Courts & Scandal
1 itemministerial conduct
T.T. Krishnamachari resignation (allegations involving family firms / TTK & Co.)
FM resigned 1965-12-31; no finding recorded
ReportedPress. Source: the1991project.com; Wikipedia FM list
Shipping & Insurance
1 itemall
Indian and Pakistani ports / Arabian Sea
ReportedHeterodox institution. Source: [M3] China P&I Club, LP 31/2019 (chinapandi.com)
The Ledger: what was borrowed in 1965
Full ledger →| Creditor | Instrument | Amount | US$ m | Status | Grade |
|---|---|---|---|---|---|
| IMF | Stand-By 1965-03-22 to 1966-03-21 | 200 USD | 200 | fully drawn; repaid by FY1970-71 | verified |
| International Monetary Fund | Stand-by Arrangement, 1965-03-22 to 1966-03-21 | 200 SDR (USD at par) | 200 | Fully drawn (200 of 200). This is the SBA in force going into the devaluation. The IMF lending table lists no stand-by dated 1966. | verified |
| International Monetary Fund | Reported withholding of about USD 150 mn pending corrective measures (Dec 1965) | 150 USD | 150 | Contested / not confirmed in IMF records | unknown |
Rows are listed as recorded. Some describe the same loan from different sources and must not be added together.
