Answer: Option B
Answer: (b)
The Tarapore Committee on capital account convertibility had laid down a three year, three-phase schedule for allowing convertibility.
It laid down three pre-conditions:
fiscal consolidation implying that the centre’s fiscal deficit should come down to 3.5 per cent of GDP;
a mandated inflation target; and
strengthening of the financial system to
involve a near-complete clampdown on activities of weak banks,
major cut in the CRR, and
complete deregulation of interest rates.