D. Subbarao, the Governor of the Reserve Bank of India (RBI) has said that the economic situation at present is not like that in the year 1991, when Indian government had to seek external help for salvaging the country's economy.
He pointed out that the exchange rate has become market-determined and the country's foreign exchange reserve is much larger at present than it was in 1991. The service sector, which has been booming in recent times, now account for 65 per cent of the total GDP of the country.
He said that areas like infrastructure, skill upgradation, fiscal consolidation, governance reforms at the centre and states and managing challenges of federalism must be looked upon in order to boost growth. The increased level of savings has now made its way to boost funding for investment in production and has helped increase the country's productivity.
Former Finance minister and the current president of India, Pranab Mukherjee has dismissed suggestions that the economic situation in the country can be compared to that in 1991. He pointed out that the foreign currency reserve of the country today is much stronger than in 1990. He said that such comparisons are incorrect while making a presentation to the Congress Working Committee on the economic situation.
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