Economic situation not as grim as in 1991: Pranab

Stung by suggestions that India's economy had slid to as precarious levels as in 1991, finance minister Pranab Mukherjee on Monday dismissed the possibility that India's economic situation was anywhere close to 1991.

Mukherjee's comments were prompted by the drop in the fourth quarter GDP estimates of an abysmal 5.3 per cent, with forecasts for 2012-13 projecting an even further drop in the rate of growth, at a press conference after the day-long Congress Working Committee meeting in New Delhi..

The finannce minister said that attempts were being made to compare the current situation with 1991. "There is no reason to believe that we are going back to the situation of 1991 because our fundamentals are very strong," he said.

Acknowledging the slowdown, he said, the current account deficit, which is 4 per cent of the GDP today, is a percent more than it was in 1990. "But even then we have 7.5 months of foreign exchange reserve with us today. There is no reason to believe we are going back to 1990,'' Mukherjee said.

''The comparison between 1990 and 2012 is not correct. The basic fundamentals are very much different today. Our outstanding debt ratio is also improving,'' he said.

''We have three major areas to worry about. The high fiscal deficit, GDP trajectory and how to contain the current account deficit which is 4 percent of the GDP. There is a downward trend. As finance minister I have my responsibility. Our target is to keep fiscal deficit at 2 percent of GDP,'' Mukherjee said.