Millennium Post

PM defends reforms, says hard decisions needed

Prime Minister Manmohan Singh Friday strongly defended his government's fresh economic reforms, saying ‘hard decisions’ were needed to boost investor confidence domestically and globally.

In a nationally televised address, the prime minister hit out at the opposition of misleading the country and urged the 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-a-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 on Friday, 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. ‘The fear that small retailers will be wiped out is completely baseless.’
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