Mukherjee's first Budget, Paul's takeover bid and IMF loans

Posted By: Religare
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Mukherjee's first Budget, Paul's takeover bid and IMF loans
Finance Minster Pranab Mukherjee presented his first Union Budget in the year 1982. The highlight of that budget was the announcement that non - resident Indians would now be able to buy shares of Indian companies listed on Indian stock exchanges, up to a certain limit.

The announcement marked the first baby steps to economic reforms and liberalization. However, it also led to an interesting event. Within a few days of the announcement, UK-based NRI, Swraj Paul started buying shares of DCM and Escorts from Indian stock exchanges. Paul went on to make a hostile takeover bid over the two companies. The promoters of DCM and Escorts went into a political lobbying overdrive and Paul's takeover bid was averted only after political intervention at the behest of Prime Minister Indira Gandhi.

Another highlight of his first budget was the announcement that India was going to accept 5 billion SDR loan from the International Monetary fund in order to fund its current account deficit. India's political class had then strongly opposed the idea of accepting loans from the IMF, terming it as giving up the nation's sovereignity. Time went on to show that the Indian political class was wrong as always and India and Indians survived and thrived on IMF loans for a long time to come.

Read more about: union budget 2012, pranab
Story first published: Tuesday, March 13, 2012, 13:33 [IST]
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