In 1990s, foreign exchange which were borrowed from other countries were spent on meeting the consumption needs of the country at times?
Answer & explanation
Correct answer: option 1
During 1990's, the income from public sector undertakings was also not very high to meet the growing expenditure. At times, our foreign exchange, borrowed from other countries and international financial institutions, was spent on meeting consumption needs. The government didn't make any efforts to boost the exports to pay for the growing imports which eventually resulted in reduction of the forex reserves in the economy.