UPA has taken economy back to 1991: Yechury

"If this fall in the rupee continues, it will soon touch Rs. 80 a dollar”

New Delhi, November 28, 2011:CPM leader, Sitaram Yechury at the Parliament House in New Delhi on Monday, November 28, 2011. Parliament was stalled by the opposition due to UPA government's decision to allow FDI in the retail sectors. Photo: Rajeev Bhatt

The Communist Party of India (Marxist) has accused the United Progressive Alliance of pushing the country towards a situation similar to the major financial crisis of 1991 and demanded immediate changes in the economic policy.

“The Prime Minister has virtually failed to tackle the situation. We demand immediate alteration of policies being pursued by the government,” senior CPI(M) leader Sitaram Yechury told reporters during the party’s two-day Central Committee meeting that began here on Saturday.

Blaming the government’s economic policies for the slide of the rupee, the Sensex fall and a substantial rise in the current account deficit, he said: “If this rate [of fall in the currency’s value] continues, the rupee will soon touch Rs. 80 a dollar.”

The economic policies “have brought the economy to the same place as we started in 1991, two decades down the line. The country was faced with a major financial crisis then,” he recalled.

In 1991, the government had to airlift gold reserves as pledge with the International Monetary Fund (IMF) for a loan.

“Put more money in infrastructure”

He demanded stoppage of all concessions being given to foreign capital. More money should be put into infrastructure development and that would generate internal resources and beef up internal market by increasing people’s purchasing power. “Without this, the economy cannot be revived.”

With foreign exchange reserves “plummeting,” Mr. Yechury said, the current account deficit now was 4.8 per cent of the GDP, while the current account balance was 5 per cent. “So, the entire GDP would be required to fill up the deficit” and not for any productive use.