............. Subbarao directly addressed fears that under Singh, India had come full circle. 2012 was not 1991, he said, although “the twin deficits are here once again”. Short-term debt was high, too; but the structure of the economy had changed fundamentally, and the financial system, he insisted, could absorb shocks. In addition, there are other reasons for optimism: the services sector dominates today, and its performance is a source of resilience; not all of the fiscal deficit is structural; and forex reserves are much larger. Subbarao also addressed external-sector liberalisation, which he viewed as the most far-reaching of Singh’s reforms.........
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