ISSN (Print) - 0012-9976 | ISSN (Online) - 2349-8846
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Exchange Rate Fluctuations

Two reasons were advanced, besides the mechanisations of the IMF, for this dismal state of affairs. First, the rise in prices of oil since 1973. Second, government spending beyond its means. Thus social welfare programmes, were initiated which included special employment programmes, land redistribution and incentives for increased agricultural production, national insurance scheme and a statutory minimum wage. In 1974-75 the government spent 40 per cent of its current expenditure and 20 per cant of capital expenditure on welfare programmes, By 1978 the Manley government was forced to give up its attempts to chalk out a non-IMF oriented development. Currency was devalued by 50 per cent under IMF pressure. Price controls were lifted and annual wage increases were limited to 15 per cent. This, in turn, naturally led to popular agitations against price rise, unemployment and net decrease in wages. Such development from above strategy, without mass mobilisation even alter the landslide victory in 1976

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