NO ’91 CRISIS Rising fiscal deficit disturbing: Subbarao

New Delhi: Reserve Bank of India (RBI) governor D Subbarao has said that rising fiscal deficit and short-term debt levels are "quite disturbing", but the nation is not facing a repeat of the 1991 balance of payment crisis. 

    While the 1991 crisis was triggered by high oil prices almost drying foreign reserves and currency crash, large fiscal deficit and current account deficit are lead indicators of stress building up in the system again, he said at a panel 

discussion on India's economic reforms and development. 

    With Prime Minister Manmohan Singh listening, Subbarao said fiscal deficit in 1991 was 7% and it is ruling at 5.9% in 2012. The current account deficit at 3.6% is higher than 1991 figure and short-term debt at 23.3% of GDP in 2012 is much more than 10.2% in 1991. 

    "That is quite a disturbing picture. Nevertheless, I would still argue that in 1991, an implosion was imminent. In 2012, an implosion is not imminent," he said. AGENCIES