By Vivek Singh
Today the entire world is facing serious financial problem due to covid-19 pandemic. Fortunately there is no visible serious and long term impact of covid-19 on Indian economy. Indian economy is progressing as expected. There is tremendous increase in the Foreign exchange reserves of India. As per data released by Apex Bank of country Reserve Bank of India, foreign exchange reserves of India increased by $3.62 billion and touched all time high $538.19 billion mark at the week ended on 7th July 2020. On 5th June 2020 first time in the history of country foreign exchange reserves crossed $500 billion mark.
In 1960 India had Foreign exchange reserves that can hardly manage 7 to 8 weeks of imports. Situation was even more critical in1980. In 1980 India had only $7 billion as foreign exchange reserves. Situation was very critical in 1990 when Chandra Shekhar became prime Minister of India, at that time government of India had only $1.1 billion in foreign exchange reserves which could hardly manage 10 to 14 days of imports. In order to make situation better Reserve Bank of India pledged 48 tonnes of gold with foreign bank to get loan of $400 million.
India is amongst five countries in the world having more than $500 billion in foreign exchange reserves. China is on top position with $3298 billion foreign exchange reserves. Japan is on 2nd position with $1402 billion of foreign exchange reserves. Switzerland is on 3rd position with $896 billion of foreign exchange reserves. Russia is on fourth position with $590 billion of foreign exchange reserves and our country India is on 5th position in the world to have $538 billion as foreign exchange reserves. Taiwan has $496 billion in its foreign exchange reserves, Hong Kong $446 billion, South Korea $416 billion, Brazil $349 billion in foreign exchange reserves. These are the countries which are referred as financially strong countries. Singapore has only $321 billion in its foreign exchange reserves, Germany $245 billion, France $238 billion, Britain $179 billion as foreign exchange reserves. United State of America, the super power has only $132 billion of foreign exchange reserves.
In 1991 India was left with only $5 billion of foreign exchange reserves. Within 30 years in 2020 now we have $538 billion in foreign exchange reserves. It means within 30 years there is tremendous increase of more than 10000%. In February 2002 India managed to have $50 billion in foreign exchange reserves. in March 2004 India’s crossed $100 billion, April 2007 $200 billion, February 2008 $300 billion, September 2017 $400 billion and on 5th of June 2020 India had crossed $500 billion mark of foreign exchange reserves.
India can utilise its image due to tremendous increase in the foreign exchange reserves to attract foreign investment into the country. India can also import technology to produce better quality goods and services. foreign exchange reserves can also be used for import of defence and other essential commodities. Foreign exchange reserves of any country is indicator of progressive economy.
Now India has sufficient Foreign exchange reserves that can easily manage 18 months import. Now we have more than half trillion dollars Foreign exchange reserves and country is in the list of top five countries of the world to have more than $500 billion Foreign exchange reserves. Increase in foreign exchange reserves is certainly indicating progress and development of India. Under the able leadership of prime Minister Narendra Modi now India has become self-reliant in foreign exchange reserves as well.
(Vivek Singh is a columnist. He can be reached at viveksinghmumbai@gmail.com)
