NEW DELHI, Sept 21:
Warning against the country slipping back into 1991 economic crisis, Prime Minister Manmohan Singh today said time has come for “hard decisions” to put the country on the path of high and inclusive growth.
Seeking trust and understanding of the people in a televised address to the nation, he asked them not to be misled by those who want to confuse them by spreading fear and false information like they did unsuccessfully in 1991.
Speaking against the backdrop of Trinamool Congress withdrawing support to the Government on FDI and diesel price hike and the opposition from other parties, Singh said, “we have much to do to protect the interest of the nation and we must do it now.
“At times, we need to say ‘no’ to the easy option and say ‘yes’ to the more difficult one. This happens to be one such occasion. The time has come for hard decisions,” he said.
“For this, I need your trust, your understanding and your cooperation,” he said justifying the Rs five hike in diesel price, cut in sup-ply of subsidised LPG cylinders and allowing FDI in multi-brand retail.
Referring to the ballooning oil subsidy which would have touched Rs two lakh crore this year, up by Rs.60,000 crore last year, he asked where would the money for this have come from.
“Money does not grow on trees. 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,” he said.
Painting a grim picture, Singh said if unchecked this would lead to a further steep increase in prices and loss of confidence in economy.
The prices of essential commodities would rise further. Both domestic as well as foreign investors would be reluctant to invest in our economy. Interest rates would rise, our companies would not be able to borrow abroad and unemployment would increase, he said.
Drawing comparisons with the 1991 situation when he unleashed a wave of reforms, he said nobody was willing to lend even small amounts of money then.
“We came out of that crisis by taking strong, resolute steps. Your can see the positive results of those steps. We are not in that situation today, but we must act before people lose confidence in our economy,” he said.
Noting that the world is not kind to those who do not tackle their own problems, Singh said many European countries are in that position today. They cannot pay their bills and are looking to others for help. They are having to cut wages or pensions to satisfy potential lenders, he said.
“I am determined to see that India will not be pushed into that situation,” he said, adding, “But I can succeed only if I can persuade you to understand why we had to act.”
On the diesel price hike, he said it was done by just Rs 5 a litre instead of Rs.17 that was needed to cut losses on diesel.
“Much of diesel is used by big cars and SUVs owned by the rich and by factories and businesses. Should Government run large fiscal deficits to subsidise them ?” he asked.
On the annual cap on subsidised LPG cylinders, he said, “almost of our people, who need our help the most, actually use only 6 cylinders or less. We have ensured they are not affected. Others will still get 6 subsidised cylinders, but they must pay a higher price for more.”
In his rare televised address to the nation, the Prime Minister insisted that the concerns over allowing FDI in retail were “baseless” as there is enough scope for big and small retailers to grow.
Noting that fears had been created in 1991 when he as Finance Minister had initiated economic reforms, Singh said those behind the scare “did not succeed then” and “they will not succeed now”.
“No Government likes to impose burdens on the common man… At the same time, it is the responsibility of the Government to defend the national interest, and protect the long term future of our people,” he said.
Underlining that the Government was at a “point where we can reverse the slowdown in our growth”, he said, “We need a revival in investor confidence domestically and globally. The decisions we have taken recently are necessary for this purpose”.
In his 15-minute speech first in Hindi and then in English, Singh said his Government has been voted to office twice to protect the interests of the ‘aam admi’.
“Rapid growth is also necessary to raise the revenues we need to finance our programmes in education, health care, housing and rural employment,” he said.
Meanwhile, the UPA Government today breathed easy with the Samajwadi Party bailing it out pledging its continued support as Trinamool Congress formally split with the coalition withdrawing its backing after its ministers quit.
Significantly, the TMC, which withdrew the support of 19 of its MPs to the Government, did not press for a vote of confidence by the government in the Lok Sabha when they met President Pranab Mukherjee.
Breaking the suspense, SP chief Mulayam Singh Yadav, who had yesterday joined hands with the Left and other parties on the streets of Delhi against the Government’s decision to allow FDI in retail and the diesel price hike, came out with a statement totally backing to the UPA.
“Our support is clear. We will not let communal forces come to power. That is why I am supporting. I am not in UPA. But we are supporting so that communal forces do not not make any progress,” he told reporters in Delhi.
The pledge of continued support by Mulayam Singh Yadav, leader of the 22 MP-strong SP, “to keep the communal forces at bay” will ensure the backing of over 300 MPs to the Manmohan Singh Government in the 545-member Lok Sabha.
The withdrawal of support by TMC left brought the strength of UPA and its allies to 254, 19 short of the half-way mark of 273 in the Lok Sabha that is required for a simple majority.
However, the backing of 50 MPs belonging to outside allies like SP (22) and BSP (21) takes the coalition’s support to over 300.
Six Trinamool Ministers including Mukul Roy, who held the Railway portfolio in the Cabinet, and five others Ministers of State—Saugata Roy, Sultan Ahmed, Sudip Bandhopadhyaya, Sisir Adhikari and Mohan Jatua—met Prime Minister and handed over their resignations.
Bandhopadhyay later said the Prime Minister told them he was sad at their resignation.
Later, they drove to Rashtrapati Bhawan where Mukul Roy handed over a letter as Chairman of the Trinamool Congress’ Parliamentary Party “withdrawing our support” to the government.
Asked whether the Trinamool delegation sought a vote of confidence by the government when they met the President, Saugata Roy said, “we had not said anything extra. We tendered our resignation and we had given our (letter of) withdrawal of support. Beyond that we did not say anything.”
However, Mukul Roy said since the majority of parties were opposing the FDI in retail the Government should seek a vote in Parliament on the issue.
The Samajwadi Party’s rescue act today brings to mind its earlier act of comming to the aid of UPA I in 2008 after the Left parties withdrew support on the issue of nuclear deal with the US. SP MPs voted with the Government that was one of the major factors in the UPA coalition passing the muster in a controversial trial of strength then.
In Kolkata, West Bengal Chief Minister and Trinamool Congress chief Mamata Banerjee said notifying implementation of the decision on FDI in multi-brand retail by a “minority Government” was unethical and undemocratic.
“We are in the fight to protect the interests of the people. We will win,” Banerjee said.
On its part, the Government ruled out seeking a confidence vote in the Lok Sabha.
Parliamentary Affairs Minister P K Bansal said there was no doubt about the Government’s majority and so there was no need to take a floor test.
Replying to questions including on whether SP will be withdrawing support to UPA, Yadav said, “why will we take the support back? We have to keep communal forces away from power. But we are not in UPA.”
Asked if he was in favour of mid-term elections, Yadav shot back, “where is the question of mid-term polls? Ask Congress about this, what they want and whether they want it or (they want to) run the Government.”
When suggested that it is said he will be responsible if mid-term poll takes place, Yadav said, “it does not depend on us. This is Government’s responsibility.”
Questioned whether the Government is in minority, he said it will be clear in the Lok Sabha.
Asked about Government issuing notification of FDI soon after the protests, he said his job is to inform people and his party was not with UPA on this.
“We will keep opposing FDI and diesel price hike. We will oppose this in Lok Sabha also as it will hurt five crore people in the country,” he said.
Yadav said it was a “meaningless talk” when asked whether his party will join the Government.
BJP today described as “disappointing and uninspiring” Prime Minister Manmohan Singh’s address to the nation, saying that instead of rolling back the hike in diesel price and removing the cap on cooking gas cylinders he has only sought to justify them.
“The Prime Minister’s speech was uninspiring and disappointing. We are not happy about the speech at all….
“The people were expecting some relief, that he will be taking back the hike in diesel price and the cap on LPG cylinders. But he has only made lame excuses,” BJP spokesperson Prakash Javadekar said.
BJP alleged Singh has only cited the economic crisis when the “real reason” behind the hike is corruption in UPA Government.
“The PM could have acted tough on corruption and announced cancellation of the coal blocks allocations and auctions which would have given Rs 1.86 Lakh crore to the Government coffers,” Javadekar said.
Terming this as a “failure” of the “economist PM”, BJP said while the Prime Minister should be announcing creation of more jobs, he is banking of foreign retail giants like Walmart to do so in India.
“Walmart is not coming to India for charity….The Government is bringing in FDI in multi-brand retail under foreign pressure,” Javadekar said.
Attacking Singh for his comments that money does not grow on trees, BJP said “this is akin to rubbing salt on the wounds of the people”.
BJP said the hike in diesel price will increase the consumer price index from the present 10 per cent to 12 per cent and have a cascading effect on the economy.
“It will mean an additional burden of Rs 40,000 crore,” Javadekar said.
Farmers, fishermen, public transport will suffer due to this, he charged.
The party maintained that the PM’s contention of families using only six cylinders per year is not true and it is due to choking of the supply chain, which forces them to make do with just six. (PTI)
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