New Delhi, August 17
Prime Minister Manmohan Singh today dismissed the possibility of a throwback to the 1991 balance of payments crisis situation in the economy.

“There is no question of going back to the 1991 balance of payment crisis. At that time, foreign exchange in India was a fixed rate. Now it is linked to market. We only correct the volatility of the rupee,” he told mediapersons on the sidelines of a Reserve Bank of India (RBI) function at his residence.

The Prime Minister’s assertion comes a day after the stock market slumped, with the BSE Sensex plunging by 769 points and the rupee hitting another all-time low of 62.

The Prime Minister said in 1991, the country had foreign exchange reserves for only 15 days. “Now we have reserves for six to seven months. So there is no comparison… and no question of going back to the 1991 crisis.”

On if there was no basis to fears of a return to the 1991 situation, he said: “No. There is no question.”

Against the backdrop of the high current account deficit (CAD) and the all-time low value of the rupee, the Prime Minister was asked about fears in some quarters that the country might be witnessing a throwback to the 1991 crisis when gold was pledged and the country was forced to adopt a reforms programme.

He was speaking at the release of fourth volume of RBI history “RBI History — Looking Back and Looking Ahead”.