While extending a helping hand, the IMF drew attention to India’s long-term problems. The mounting external debt situation had been made worse by the fact that the share of short-term debt had risen steeply in recent years. If India wished to avert a payment default, it would be better advised to enter into a medium-term structural adjustment and stabilization programme. Camdessus assured Rangarajan and Nayyar that increased IMF support would be available provided the Indian government was able to get its annual budget passed.
