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CSIR NAL Recruitment 2022 For Project Staff Posts: Check Salary, Eligibility And How To Apply 25 mins ago.CBSE Exam Date 2023 Released: Check Class 10 and 12 Datesheet Herejust now.Hence all these cases bring the exchange rate at USD = 12.34 INR in 1985 and in the 1990 it became to 1 USD = 17.50 INR. Indira Gandhi also reduced the confidence of foreigners in the Indian economy. So to pay this import bill India borrowed foreign currency which reduced the value of Indian currency. Political Instability and Oil Shock of 1973: Oil shock of 1973 caused when the Organization of Arab Petroleum Exporting Countries (OAPEC) decided to cut the crude oil production which further increased the oil import bill. Image source:To increase the domestic production scenario, Indian government needed technology, to have technology and to tackle higher inflation and to open the Indian economy for foreign trade, government devalued external value of rupee and nowģ. India- China war of 1962, Indo-Pakistan war of 1965 and huge drought in 1966, crippled the production capacity of the Indian economy so inflation increased in the economy. War with China and Pakistan: Indian government was facing budget deficit and was in a state that it could not borrow more additional loan from outside due to negative rate of savings.