- 1962 (China) and 1965 (Pakistan) Wars:
- Led to massive increase in defence expenditure.
- Resulted in government’s consolidated fiscal deficit of 7.3% of GDP in 1966-67.
- Contributed to economic vulnerability with high inflation and low foreign exchange.
- 1971 War:
- The text does not explicitly detail the economic impact of the 1971 war in this section.
- However, it mentions the oil crises of the 1970s as a separate challenge.