New Delhi, Aug 30 (IANS) Prime Minister Manmohan Singh Friday said India is not heading back to a 1991-like crisis, when the country was forced to pledge its gold to pay import bills, and the economy would expand by 5.5 percent in the current fiscal.
"There is no reason to believe that we are going down the hill and that 1991 is on the horizon," the prime minister said in the Rajya Sabha, the upper house of parliament.
Manmohan Singh pointed out that India has around $280 billion of foreign exchange reserve, which is sufficient to finance nearly seven months of imports.
In 1991, India's foreign exchange reserve had fallen to $3 billion, not enough even to cover three weeks of imports. The country was forced to pledge its gold with the International Monetary Fund (IMF) in order to pay its bills.
Manmohan Singh said the Indian economy is expected to grow at around 5.5 percent in the current financial year.
"I sincerely hope that the growth rate will be 5.5 percent in the current financial year," he said.
India's gross domestic product (GDP) growth slumped to a decade low of five percent in the financial year ended March 31, 2013. Many analysts feel the economy is unlikely to recover this fiscal.
Earlier, speaking in the Lok Sabha, the lower house of parliament, the prime minister expressed hope that the economic growth would remain "flat" in the first quarter of the current financial year.
The Central Statistics Office (CSO) is scheduled to announce the provisional data for the country's gross domestic product (GDP) later in the day.
"Growth has slowed down in recent quarters. I expect growth in the first quarter of 2013-14 to be relatively flat, but as the effects of the good monsoon kick in, I expect it to pick up," he said.
"There are many reasons for this optimism. The decisions of the Cabinet Committee on Investment in reviving stalled projects will start bearing fruit in the second half of the year," the prime minister said.
Manmohan Singh said the full effects of the growth friendly measures taken by the government in the last six months, such as liberalising norms for Foreign Direct Investment, resolution of some tax issues of concern to industry and fuel subsidy reform would come into play over the year resulting in higher growth particularly in manufacturing.
"Exports are also starting to look up as the growth performance of the rest of the world is showing signs of improvement. So I believe growth will pick up in the second half of the fiscal year barring extreme unforeseen eventualities," he said.