INDIAN ECONOMY 33 of export promotion, import duty exemptions have been offered to a wider range of domestic producers, import licensing has been eliminated for Free Trade Zones and 100 per cent export-oriented units and MRTP companies have been freed of all restrictions in the setting up of export-oriented units. The Government of India can thus on no account be accused of a half-hearted implementation of the set of policy measures advocated by the IMF. Given this background of effective implementation of liberalisation measures by the government, we should expect to find encouraging trends emerging in the balance of payments position since the loan was taken basically to resolve problems in this area. Since the late 1970's there have been indications that official thinking in India has been veering round to the view that the impetus to growth from import-substituting industrialisation has been exhausted and that export-led growth strategies held far greater potential. Implicit in this changed official emphasis was the belief that the strategy of import-substituting industrialisation followed so far positively discriminated against exports, and that corrective measures were essential if there was to be a sustained expansion of exports. The Alexander Committee report of the late 1970's recommended a rationalisation of the structure of subsidies and the provision of more export services and led to the first major import control liberalisation in 1978-79.1 The majority report of the Tandon Committee on export strategy recommended a range of measures designed to provide preferential treatment to the export sector of the economy in the spheres of licensing, MRTP regulations, duty exemptions and provision of inputs at international prices.2 The basic assumption underlying the liberalisation of import controls from 1978-79 onwards is that of the possibility of achieving an expansion of exports through efficiency— itself to be brought about through exposing the economy to international competition. Import liberalisation was combined with vigorous export promotion measures—the cost of which has led to subsidies on exports occupying a major position in the Central Government's budgetary subsidies. Since policies aimed at export growth have increasingly been implemented since the late 1970's and since, to quote the IMF document, "the focus of the adjustment of the economy aimed at establishing the medium term viability of the balance of payments", it does not seem unreasonable to expect to discern trends of this viability emerging at this juncture. Balance of Payments In fact, the balance of payments position in 1981-82 saw a further deterioration as compared to 1980-81. Reserves declined by Rs.1467 crores and brought the total deficit to Rs.2417 crores, of which the IMF loan covered about Rs.950 crores. The actual depletion of reserves in 1981-82 has therefore been almost 80 per cent higher than