Rising imports of crude and petroleum products have led to a severe balance of payments problem. On the other hand, the costs and prices of a wide range of goods have increased due to global inflation in oil. Inspite of stringent monetary and fiscal controls, the wholesale price index in India has been steadily rising. With heavy reliance on imported energy products like oil, a significant percentage of the export earnings, which otherwise could be channelised into productive domestic investments, is now being diverted to meet expenditure on these imported products.