Communist Party of India-Marxist (CPI-M) politburo member Sitaram Yechury on Saturday said Prime Minister Dr Manmohan Singh has said nothing new about the prevailing economic situation in the country, and added that the figures being projected by the government, suggest that the country is virtually back to the situation that existed in 1991.
“Today if you look at all the basic parameters and if you look at statistics given out by the government itself, you are virtually back to 1991 situation. You have a Current Account Deficit which is the difference between your exports and imports to the tune of 4.8 per cent of your GDP. Your GDP this year the government itself says most optimistically it will be at best 5 per cent,” Yechury told media here.
“That means your entire GDP growth rate this year will be sufficient to only meet your Current Account Deficit. Your foreign exchange reserves have dipped to the lowest point where you can only finance imports for the next six months or so. A similar situation was there in 91 when Dr Manmohan Singh stepped in and he said economic reforms is the only way,” he added.
Taking a jibe at the UPA Government’s economic policies, Yechury said ‘the reality is two Indias are in the making today, one that is gaining from this reforms and the other one whose lives are becoming more and more miserable and the gap between these two is widening’.
“So, now again saying that the globalisation policies will continue. Globalisation means what. Does it mean that foreign capital gets access to use our resources, our raw materials in order to make their profits or will India and the people also gain?” said Yechury
“And that is the point which I think Dr Manmohan Singh is very difficult to hide now and very difficult to conceal is that the beneficiary of these reforms at most has been big Indian capital and foreign capital. And as far as the people and the economy is concerned, that situation has been regressive,” he added
The CPI-M leader further called for concentrating on expanding India’s domestic demand. “The world is in a slump, you cannot gain by exporting there is no market abroad. So, to stop Indian market for that stop giving these incentives to corporates, collect the legitimate taxes utilise those taxes for public investment to build our much-needed infrastructure. That will create jobs that will increase domestic demand on the basis of which manufacturing and industry will grow. That is the way forward,” he said.
The Prime Minister earlier today ruled out the possibility of India witnessing a repeat of the 1991 balance of payments crisis and also reversing the path to globalisation of the economy.
“There is no question of going back to 1991 (balance of payment crisis). At that time foreign exchange in India was a fixed rate. Now, it is linked to the market. We only correct the volatility of the rupee,” he said
Dr Singh, who was talking to media at the release of RBI Governor D Subbarao’s book ‘RBI History 1981-1997’, pointed out that foreign exchange in India was at fixed rate at that time, but now it is linked to market and we only correct the volatility of the rupee.
“Now we have reserves of six to seven months. So, there is no comparison and no question of going back to the 1991 crisis,” he said
Replying to a question that the Current Account Deficit was still high, Dr. Singh acknowledged the problem, saying high imports of gold was one of the major factors contributing to it.
Lauding the RBI's role in shaping India’s monetary policy, Dr. Singh said the apex bank has served the nation with great distinctions and the best is yet to come
“History of the Reserve Bank is the history of the growth of our country since independence. The Reserve Bank has done the country proud,” he said, while asserting on the role played by the RBI in shaping India’s monetary and credit policy.