PM concedes country facing difficult economic situation
With falling rupee and rising oil prices casting a shadow over Indian economy, Prime Minister Manmohan Singh on Thursday said the country is faced with a difficult economic situation for which some domestic factors too were responsible.
New Delhi: Facing attack over the economy amid sliding rupee, Prime Minister Manmohan Singh Thursday conceded in Parliament that the country was going through a "difficult" situation and had to reckon with the uncertainties created by global factors like "new tensions" in Syria.
Singh made brief remarks in both the Rajya Sabha and the Lok Sabha as concerns were expressed over the rapid depreciation of rupee with the Opposition saying there was panic in the country.
He promised to make a detailed statement on Friday.
The Lok Sabha witnessed repeated adjournments amid the Opposition demand for an immediate statement from the Prime Minister. Left and AIADMK members even trooped into the Well in the Lok Sabha.
There was uproar in the Rajya Sabha also for some time.
"It cannot be denied that the country is faced with a difficult economic situation. And there are several causes. I do not deny that there are some domestic factors but there are also international factors arising out of the changes in the US monetary stance," Singh said in impromptu remarks.
Apparently referring to looming possibility of US strikes on Syria, he said "there are also problems created by the new tensions that are on the horizon in Syria and they have inevitable consequences for oil prices. So we have to reckon with all those uncertainties."
He said he will make a statement tomorrow as "I need some time to reflect on what I have to say".
Later in the Lok Sabha, he said "I respect the concerns expressed by the members" and that a statement will be made tomorrow.
As soon as the Rajya Sabha met for the day, Leader of the Opposition Arun Jaitley raised the issue of depleting value of the rupee, which has fallen 20 percent against the US dollar this year and already breached the Rs 68 mark, and said there was "panic" as people did not know at what level the devaluation would stop.
Inflationary pressure would be twice as the rising food prices, coupled with imported inflation in the form of rising oil prices in the global market, would lead to a serious situation, he said.
"It is a panic situation... We want to know from the Prime Minister what he has in his mind for reviving the situation. In a democracy, the buck stops at the Prime Minister and not disappear," he said adding, "the Prime Minister must take the House and the country into confidence".
Sitaram Yechury (CPI-M) said the country has "come back to square one" after 22 years of reforms under Manmohan Singh as the economy is facing the same crisis as it did in 1991.
In the Lok Sabha, several political parties slammed the government over the sliding rupee which has breached the Rs 68 to a US dollar mark.
When the House met for the day, Leader of the Opposition Sushma Swaraj sought Speaker Meira Kumar's permission to speak during Question Hour on the continuous fall in the value of the rupee.
"Day before yesterday there was a debate in the House on the state of the economy in which the Finance Minister gave a long speech enumerating 10 steps and maintained that if these are implemented the economy will improve.
"After this the confidence of the country and the investors should have increased by at least 10-20 paise but it has actually fallen," Swaraj said.
Rubbishing Finance Minister P Chidambaram's contention that the economy is in a bad shape as the country's polity is divided, the BJP leader said before accusing the opposition the government should bury its differences as it is a divided House.