Activity

If any Government becomes bankrupt like the Government of Louis XVI, what measures do you think are required to overcome the crisis.

If any government get bankrupt, like the government of Louis XVI, it should take the following steps:

1. Imposing Financial Emergency: The state should impose financial emergency and reduce the salaries of government employees. It should cut tax benefits, reduce welfare schemes and divert money to its coffers.

2. Take citizens in confidence: Instead of hiding and running away from citizens, the government should take the people in confidence, and provide necessary moral leadership. A good example of this is the manner in which Lal Bahadur Shastri dealt with the agrarian crises in the 1960s. he gave the slogan “Jai Jawaan, Jai Kisan” and asked people to fast for a meal a day.

3. Ask for loans from foreign friends: The country needs to ask it’s diplomatic ties to regurgitate money, in exchange for open borders, free trade and other incentives.

4. End protectionism: It should invite foreign investment from the private sector.