And just how it all changed
The foreign exchange regulations in late 50s made us mean and petty, forcing us to stretch out the meagre amounts the RBI gave us, writes Rahul Singh.india Updated: Sep 21, 2007 23:57 IST
We all know the big picture: how India is the fastest growing major economy in the world, aside from China, and how the Indian middle class has grown from around 100 million people 15 years ago, to over 200 million.
Not so long ago, we had just two main cars to choose from; now several. But it’s the seemingly little ways in which our lives have changed – and improved – that I find more interesting.
Take foreign exchange. There was a time, decades back, when the rupee was convertible and rupees, dollars and pounds flowed back and forth freely across international borders. In the late 50s and early 60s, one-pound sterling fetched 12 rupees (compared to over 80 presently). Then, for reasons that are unclear to me, but which economic pundits can explain, the rupee became non-convertible and foreign exchange terribly scarce. Even if as a student you got admission to a prestigious university like Cambridge or Oxford, as I did, the amount you could remit abroad to pay for your tuition, lodging, meals and other related expenses was severely restricted: just 600 pounds a year. I once recall my bank manager in Cambridge, calling me inside his cabin and politely telling me that I had overdrawn from my account. I was mortified and assured him that some funds would be coming soon from India.
On another occasion, since my bank balance was hovering near the zero mark, I was about to take up a temporary job in a post office during my summer vacation. When my tutor found out, he was horrified and promptly found some kind of bursary to enable me to have a holiday on the continent instead of licking stamps. Even prosperous Indians could not legitimately take or send money abroad. I had a school classmate, let us call him Anil, who was the son of a jeweller. He got admission to a top American university but could not get RBI sanction for sufficient exchange to pay for his studies. His father got in touch with a jeweller friend in the USA and gave his son a diamond ring to wear when leaving India which was worth all the extra money he needed (the Indian customs evidently had no idea of its real value). Anil gave that ring to his father’s jeweller friend and in return got sufficient dollars for his studies!
This was just one of the many clever ploys, illegal to be sure, used to overcome the foreign exchange problem. Some enterprising types would take with them Indian artefacts, silk scarves, and the like which were fairly cheap here but fetched a good price in the boutiques of New York, London or Paris — and sell them there. There were also those who got foreign exchange from the Indian black market — at a hefty premium of course — and hid the bank notes in their underwear or in the soles of their shoes, to evade the customs while going abroad. The legal amount of exchange that you could take abroad as a tourist was barely enough for a daily meal at a decent restaurant and even for that you had to go through the rigmarole of filling out forms and getting permission from the RBI. Looking back, it all seems so stupid and funny, when you can nowadays virtually take out as much exchange as you want by simply showing your passport and ticket to an authorised dealer. However, getting foreign exchange then was a tedious, serious and tense business.
The saddest part of those days was that most Indians going abroad became scroungers. We are, by and large, a generous and big-hearted people. The foreign exchange regulations made us mean and petty, forcing us to stretch out the meagre amounts the RBI gave us. We would foist ourselves on strangers (“friends of friends”) to stay with. Indian diplomats posted abroad, especially in prime Western locations, would suddenly discover long-lost relatives and “acquaintances”, turning up at their doorsteps for a meal, or worse, a roof over their heads. The ridiculous regulations also made some of us break the law, mostly in minor ways, yet they gave a handle to the authorities to hammer their critics. One of my colleagues used to write for an English publication and he asked the publication to send his payments to a nephew who lived in England. That was a small transgression, but an illegality nevertheless. When he wrote against Indira Gandhi’s “Emergency”, the government used this illegality to put him behind bars. Thank god those days are over and Indians can return to being themselves.
Then, there were kinds of goods one brought back from abroad. Foreign bras were much in demand, as we could not make them to the specifications desired (now, we export them to the West). If you were a man and did not know the exact size, you had a problem when buying them from the English saleslady at Marks & Spencers (“A little bigger than yours” you would say, looking meaningfully at her bust). I recall coming back with several of them of different sizes and tints for my lady friends and having them all spill out from my suitcase under the bemused gaze of the customs official. If you had the exchange to buy them, mixies and various kitchen gadgets, along with electronic goods, were also prized —and scrutinised carefully by the customs.
A couple of years ago, I was in Dubai and discovered that the mixie, which outsold the “phoren” brands, was an Indian one! Now, you can even carry a laptop computer back duty-free and the only items I find myself bringing in from a trip abroad are cheeses and chocolates, though I am sure that these too we will soon be made here to acceptable standards. The attitude of the customs officials has also changed. Hawk-eyed and aggressive (also often corrupt) earlier, they now genially wave you through, often not even putting your baggage through the x-ray machine. They are on the lookout for something more deadly: narcotics and explosives.
There are other memories: remember, the long wait for a gas cylinder, a phone line, a car, even a scooter, and the inflated prices one paid for a TV, fridge or an AC? Yes, times have certainly changed, definitely for the better, in these small yet important ways.
Rahul Singh was Editor of the Reader’s Digest and the Sunday Observer