Prime Minister Manmohan Singh on Friday said India is not heading back to 1991-like balance of payment crisis, when the country was forced to pledge its gold to pay its import bills. “There is no reason to believe that we are going down the hill and that 1991 is on the horizon,” the prime minister said in the Rajya Sabha, the upper house of parliament.
Manmohan Singh pointed out that India has around $280 billion of foreign exchange reserve, which is sufficient to finance nearly 7 months of imports. In 1991, India's foreign exchange reserves had fallen to $3 billion, not enough even to cover three weeks' of imports. The country was forced to pledge its gold to pay its bills. “We are not at that level. We will not go to that level,” the prime minister said.