"It is clear that a very serious current account deficit has built up in the country and the situation is not very different from what it was in 1991," senior CPI(M) leader Sitaram Yechury told reporters ahead of the party's Politburo meeting which began here.
"You are back to square one after 22 years of so-called economic reforms which were supposed to have changed the face of the Indian economy. This was bound to happen," he said when asked to comment on the falling value of rupee vis-a-vis the US dollar.
Noting that "huge amounts of non-essential imports" like that of gold bullion, silver and luxury items were being allowed by the government, Yechury said "in this situation, the current account deficit is bound to rise. Unless that is controlled, there is no way you can stabilise the rupee."
In 1991, the government was close to default, with the foreign exchange reserves sliding to such a point that India could barely finance three weeks' worth of imports. The country had to airlift gold reserves as a pledge with the International Monetary Fund (IMF) for a loan.
In an editorial in the forthcoming issue of party organ 'People's Democracy', Yechury also criticised Prime Minister Manmohan Singh's Independence Day speech, saying the economic policies pursued by UPA government had led to the "expanding hiatus" between the rich and the poor.
Noting that the entire thrust of Singh's speech was that India could achieve a holistic development only if it is able to maintain a high growth rate, he said the government was only liberalising FDI norms which would not lead to growth or create jobs.