Reminiscing the crises after the economy opened up during the 1990s, with the state-controlled banks trying to control spiralling rupee, he said: "India has come a long way, and now the external payments situation is comfortable. The investment climate is promising and the comparative advantage of the knowledge economy is fuelling the boom in the service sector."

The Padma Vibhushan award winner, who also served as the Governor of the Reserve Bank of India during the 1990s, inaugurated a seminar on "Monetary and Credit Policy in the Post-Reform Period in India" in the memory of Professor Manu Shroff earlier on Saturday . It was organised by Gujarat Economic Association Silver Jubilee Trust.

Addressing a large gathering of students and faculty members of M S University at the I.G. Patel Seminar Hall in the Faculty of Social Work, he said liberalisation of the economy was necessary otherwise the country would have faced a major balance of payments situation leading to recession. "The liberalisation has resulted in the increased efficiency of population and that is why India has managed to sustain this growth rate," said Rangarajan.

Later in the day, he addressed a gathering of entrepreneurs and academician at a talk organised by the Federation of Gujarat Industries, Vadodara in which he apprised the audience of the recent economic trends.