The Tara pore Committee recommended that before capital account was made convertible the rate of inflation should be brought down for three years to within :

A)
0.7 %
B)
1.2 %
C)
3.5%
D)
4.6%

Correct Answer : Option (C) - 3.5%



The Tara pore Committee on capital account convertibility had laid down a three year, three phase schedule for allowing convertibility. It laid down three pre-conditions:
(a) fiscal consolidation implying that the centre’s fiscal deficit should come down to 3.5 per cent of GDP;
(b) a mandated inflation target; and
(c) strengthening of the financial system to
     (i) involve a near complete clampdown on activities of weak banks,
     (ii) major cut in the CRR,
     (iii) complete deregulation of interest rates.

Published On : June 26, 2021
Category : Indian Economy