Twenty years ago, the current Prime Minister and then finance minister, Sh. Manmohan Singh explained the urgency of implementing economic reforms in his historic budget speech.
In the last of his historic speech he told the house"Sir, I do not minimise the difficulties that lie ahead on the long and arduous journey on which we have embarked. But as Victor Hugo once said 'no power on earth can stop an idea whose time has come'. I suggest to this August House that the emergence of India as a major economic power in the world happens to be one such idea. Let the whole world hear it loud and clear. India is now wide awake. We shall prevail. We shall overcome."
At the time, India was nearly bankrupt. The government was close to default, its central bank had refused new credit. India's foreign exchange reserves was at $1.2 billion in January 1991 and depleted by half by June, barely enough to last for roughly 3 weeks of essential imports. India was only weeks way from defaulting on its external balance of payment obligations.
The then government immediate response was to secure an emergncy loan of $2.2 billion from the Internation Monetary Fund (IMF) by pledging 67 tons of India's gold reserves as collateral. The then governemnt had pledged the country's almost entire gold reserves to different agencies to overcome from this situation.
At the time (1990-91), India's Gross Fiscal Deficit was rose to 8.4% of GDP. Since, these dificits had to be met by borrowings, the internal debt of the government accumulated rapidly and rose to 53% of GDP at the end of 1990-91.
But reforms proposed by Mr. Manmohan Singh in 1991 got India out of that mess and eventually put on to a path of GDP growth of 8% and plus.
But in recent months, Indian economic situation is again getting worse and looking worsen than 1991, if we look closer on the data.
The Current Account Deficit is at 4.3% of GDP in the 3rd Quarter of 2011-12, much higher in comparison of 2.5% of GDP in 1991. This is due to high rate if import in comparison to much lower rate of export.
The Fiscal Deficit in 1991 was around 7% and now it is ruling at 5.9% in 2012. And, the Short-term Debt is at 23.3% of GDP in 2012, much more than 10.2% in 1991.
The figures are really quite disturbing and the situation looking more threatening because of the helplessness and lack of will power of Central Government.
Hope! the situation won't be so bad and India soon back on to the track of high growth rate.
In the last of his historic speech he told the house"Sir, I do not minimise the difficulties that lie ahead on the long and arduous journey on which we have embarked. But as Victor Hugo once said 'no power on earth can stop an idea whose time has come'. I suggest to this August House that the emergence of India as a major economic power in the world happens to be one such idea. Let the whole world hear it loud and clear. India is now wide awake. We shall prevail. We shall overcome."
At the time, India was nearly bankrupt. The government was close to default, its central bank had refused new credit. India's foreign exchange reserves was at $1.2 billion in January 1991 and depleted by half by June, barely enough to last for roughly 3 weeks of essential imports. India was only weeks way from defaulting on its external balance of payment obligations.
The then government immediate response was to secure an emergncy loan of $2.2 billion from the Internation Monetary Fund (IMF) by pledging 67 tons of India's gold reserves as collateral. The then governemnt had pledged the country's almost entire gold reserves to different agencies to overcome from this situation.
At the time (1990-91), India's Gross Fiscal Deficit was rose to 8.4% of GDP. Since, these dificits had to be met by borrowings, the internal debt of the government accumulated rapidly and rose to 53% of GDP at the end of 1990-91.
But reforms proposed by Mr. Manmohan Singh in 1991 got India out of that mess and eventually put on to a path of GDP growth of 8% and plus.
But in recent months, Indian economic situation is again getting worse and looking worsen than 1991, if we look closer on the data.
The Current Account Deficit is at 4.3% of GDP in the 3rd Quarter of 2011-12, much higher in comparison of 2.5% of GDP in 1991. This is due to high rate if import in comparison to much lower rate of export.
The Fiscal Deficit in 1991 was around 7% and now it is ruling at 5.9% in 2012. And, the Short-term Debt is at 23.3% of GDP in 2012, much more than 10.2% in 1991.
The figures are really quite disturbing and the situation looking more threatening because of the helplessness and lack of will power of Central Government.
Hope! the situation won't be so bad and India soon back on to the track of high growth rate.
