The finance ministry has initiated consultations with the ministries of commerce and industry, and external affairs to fully comply with the IMF stipulations on the issue of current account convertibility. In response to the IMF executive board assessment that the Indian government should try ‘to remove the remaining exchange restrictions which are subject to approval under article-VIII, section 2’, finance ministry officials said, ‘we are in consultation with the ministries of commerce and external affairs. The issue is also under discussion among the various wings of the finance ministry’. According to officials, ‘the remaining current account exchange restrictions are of minor nature. They are on account of bilateral trade arrangements with the erstwhile Soviet Union and East European countries’.Mentioned as the rupee debt in the India’s external debt status report, these debts have sharply come down from about $13 billion during 1991 to around $3 billion in December 2001. Bulk of the debt is owed to Russia and is payable in exports. The money is payable for purchase of defence equipment from the former Soviet Union. The executive directors of the Fund, in their assessment report, have also urged RBI to take advantage of the favourable external position to allow greater flexibility in the exchange rate.
