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Indian Economy

Notes The comprehensive rule aims of devaluing were:
(a) To boost Indian exports,
(b) To reduce Indian imports,
(c) To encourage import substitution and
(d) To check the flight of capital from the country.
6. Exchange Control: It is important for you to note that during World War II, exchange
control was introduced in India. However, even after independence, the strategy of strict
exchange control persisted. The shortage of foreign exchange and the need for the same
demanded the adoption of this measure.
The purpose drive of exchange control after independence was to preserve country’s
foreign exchange resources and to permit their suitable use for the country’s economic
growth.
All foreign exchange payments are to be made through the Reserve Bank of India in case
of the system of exchange control; exporters must submit all foreign exchange earnings to
the RBI in exchange for Indian currency; imports are strictly restricted and foreign exchange
is made accessible to the particular importers through rationing.

7. Liberalisation of Exchange Rate: You may already be aware that ever since 1992, in a
phased manner, all exchange limitations have been detached and Indian rupee has been
made fully convertible,
(a) In 1992-93, partial convertibility of rupee was introduced through Liberal Exchange
rate Mechanism System (LERMS).
(b) In 1993-94, introduction of convertibility of rupee on trade account took place,

(c) In 1994-95 current account convertibility was announced.
9.2 Indian Rupee

In this section, you will learn about the Indian Rupee. The Indian Rupee is the official currency
of the Reserve Bank of India which is responsible for the issuance of the currency. The symbol
that was introduced for rupee nationally in July, 2010 is “`”. This symbol was launched by
D. Uday Kumar. The most commonly used an sign for the Rupee before the launch of the official
symbol is “`”. The ISO 4217 code for the Indian rupee is INR.
In most parts of India, the Rupee is recognised as the rupee, rupaye, Rubai, or one of other terms
resulting from the Sanskrit rupyakam, raupya meaning silver; rupyakam meaning (coin) of
silver. On the other hand, in the Bengali and Assamese languages, spoken in Assam, Tripura,
and West Bengal, the Rupee is recognised as a Taka, and is printed as such on Indian banknotes.

9.2.1 Overview

The Indian Rupee is divided into 100 paise (singular paisa). As is typical in Indian English, large
values of Indian rupees are calculated in terms of thousand, lakh (100 thousand, in digits 1,00,000),
and crore (10 million, in digits 1,00,00,000). Use of million or billion, is normal in American or
British English, is far less used.

9.2.2 History

India has been one of the first issuers of coins in the world. The first “rupee” is supposed to be
introduced by Sher Shah Suri during the period 1486-1545, based on a ratio of 40 copper-coin

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