PM defends reforms, says time for hard decisions
New Delhi: Defending his government's fresh economic reforms, Prime Minister Manmohan Singh on Friday said "hard decisions" were needed to boost investor confidence domestically and globally.
In a nationally televised address, the Prime Minister lashed out at the Opposition, accusing it of misleading the country. He further urged people to have trust in his leadership.
"The time has come for hard decisions. For this I need your trust, your understanding and your cooperation," he said, comparing the situation with 1991 when India embraced sweeping economic reforms.
"We are at a point where we can reverse the slowdown in our growth. We need a revival in investor confidence domestically and globally," he said. "The decisions we have taken recently are necessary for this purpose."
The Prime Minister's speech came hours after the Trinamool Congress quit his government over the decisions to hike diesel prices, cap the supply of cooking gas cylinders and allow FDI in multi-brand retail trade.
In his speech, Manmohan Singh defended all three decisions.
He said that subsidy on petroleum products had grown enormously, and would have been over Rs 200,000 crore this year.
"If we had not acted, it would have meant a higher fiscal deficit, that is, an unsustainable increase in government expenditure vis-à-vis government income.”
"If unchecked, this would lead to a further steep rise in prices and a loss of confidence in our economy."
He said India had faced a similar situation in 1991 when "nobody was willing to lend us even small amounts of money".
"We are not in that situation today, but we must act before people lose confidence in our economy."
On the decision to limit to six the number of cooking gas cylinders a family can get each year, the Prime Minister said that "almost half of our people ... actually use only six cylinders or less".
"We have ensured they are not affected. Others will still get six subsidised cylinders, but they must pay a higher price for more," adding the price of kerosene, the poor man's fuel, remained unchanged.
Manmohan Singh denied accusations that allowing foreign direct investment in retail would hurt small traders. "This is not true."
He said that organised and modern retailing was already present in India and growing.
In Delhi, he said, despite the increasing number of shopping centres, there was a three-fold increase in the number of small shops.
"The fear that small retailers will be wiped out is completely baseless."
The speech, in Hindi and English, came a day after parts of India shut down in response to calls from anti-Congress political parties opposed to the economic decisions.
The economist-turned-politician said the people of India "have a right to know the truth about why we have taken these decisions".
The US and Europe, he said, were struggling to deal with an economic slowdown and financial crisis. Even China was slowing down. India too had been affected but not majorly.
"The world is not kind to those who do not tackle their own problems. Many European countries are in this position today."
"I am determined to see that India will not be pushed into that situation. But I can succeed only if I can persuade you to understand why we had to act."
Manmohan Singh said that in the last eight years, Indian economy had grown at a record annual rate of 8.2 percent.
"I promise you that I will do everything necessary to put our country back on the path of high and inclusive growth. But I need your support.”