ISSN (Print) - 0012-9976 | ISSN (Online) - 2349-8846

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EXCHANGE RATE-End of Stability

durablea is sure to hurt the already niggardly rate of employment growth in the non-farm sector. Finally, the domestic saving rate will be a victim of the damage caused by the policy of permitting liberal import of gold, silver and consumer goods. As it is, the saving rate has stagnated during the whole of the 1980s. While the public sector did contribute to the deterioration in the overall saving rate, the rise in the household sector's saving rate has also been negligible. (Even that increase was due to the substantial direct and indirect fiscal and other subsidies received by the households. In fact, the negative saving of government administration was to an extent attributable to these subsidies.) The counterpart of inadequate saving was the strain on the balance of payments, the phenomenal increase in the current account deficit and an unsustainable level of foreign debt. Those who may consider this picture as somewhat over-drawn need to have it pointed out to them that the value of smuggled goods

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