In 1981, India made a request for the largest loan ever under the Extended Fund Facility (EFF) of the International Monetary Fund (IMF). “Under the access limits then in effect, India could draw up to SDR 7.7 billion ($9 billion) from the Fund over a three-year period (equivalent to 450 percent of its quota).”
Of the deal, and of the conditionality to which India agreed (in secret) to adhere, an Executive Director of the IMF said: “[The] Fund could wish no more than to exercise its leverage with all prospective borrowers in the way it did in the Indian case.”
The exposure of IMF conditionality by N Ram was the most important event in investigative journalism in India at the time. It is interesting to learn now, from a history of the IMF, that, “because of the sensitivity of the information and the delicacy of the negotiations, [the IMF] management regarded this leak as ‘quite possibly the most serious and damaging . . . in the history of the Fund.’”
Read about the IMF-India deal at the link below (pp 709 ff.)
http://www.imf.org/external/pubs/ft/history/2001/ch15.pdf
The entire book is at
http://www.imf.org/external/pubs/ft/history/2001/
For those interested in the articles of that time in facsimile, see:
Conditions which IMF will impose for loan, Oct 16, 1981
Consultations with IMF – RV’s letter, Oct 16, 1981
Secret India-IMF discussions over months, Oct 16, 1981
The binding performance clauses and conditions, Oct 16, 1981
IMF management recommends India’s loan to Board, Oct 18, 1981
India’s memorandum to the IMF, Oct 19, 1981
IMF sees Indian economy moving in ‘desirable’ direction, Oct 20, 1981
What are the economic policies IMF presses on India, Oct 20, 1981
World’s most powerful supranational Govt., Oct 20, 1981
India’s liberal attitude to foreign collaboration, Oct 20, 1981