Apart from this, after first oil shock, period from 1974- 1979 was that of congenial economic atmosphere. This enabled the developing countries to maintain relatively high growth rates and service their debt in easier manner thus prompting them to accumulate more debt. However, after second oil shock of 1979, economic conditions around the world become worse that is there is 360 degree turn in economic conditions. Developing countries are now facing the increased oil prices which in turn is increasing their oil import bill and affecting the import of capital goods as well.