Facing severe criticism over the failing economy, the Government on Saturday made it clear that it will take some “hard decisions” in the next few days. Finance Minister P Chidambaram said that painful austerity decisions would be taken to trim wasteful expenditure and curb import of “inessential” items.
Replying to a debate on the Appropriation Bill in the Rajya Sabha, Chidambaram said, “We are going through a period of stress and one of its causes is inflation. We have to take some hard decisions. Many of these measures are being taken and many will be announced in the next few days and weeks. Some measures to curb import inessential items will also be announced.”
A steep hike in fuel prices is said to be on the cards. Already, the CNG price has been hiked by Rs 3.70 per kg in Delhi on the last day of the Monsoon Session, while diesel price hike is also expected soon.
Chidambaram blamed rising prices in the international market and rupee depreciation as the major cause for the present economic slide but clarified that “no decision has been taken and no decision will be taken in haste.” He said the Government will weigh the pros and cons before announcing any step. Regarding the suggestion of taking some painful decisions, like tax cuts on petroleum products, he said that only the Centre cannot take such measures as States will have to take similar steps.
Describing inflation as the worst form of taxation which hit the poorest the most, he said, the Government would be coming out with more measures to deal with the price situation. However, he attributed high inflation to increase in MSP and rise in international price of crude oil and import of pulses and edible oil.
Referring to the Court decisions affecting the coal mining due to which the country has to import coal and iron ore is not being exported putting pressure on Current Account Deficit, he said that the Government will speak to 'authorities' to increase these exports.
Holding sudden fall in the value of rupee to May 22 announcement of the US Federal Reserve regarding withdrawal of monetary stimulus, he said the Government will take more measures to increase flow of capital to contain volatility in forex market.
Chidambaram, while blaming the stimulus package announced earlier to avoid recession, tried to clarify that he was not blaming anyone in particular. This was significant as his earlier comments over it, was seen as an attack on the policies pursued by his predecessor and now President Pranab Mukherjee.
Earlier, the Opposition charged the Government of having failed to control price rise and there was complete mismanagement of food stock situation despite Prime Minister Manmohan Singh being an economist.
BJP leader Prakash Javadekar said, “The economist Prime Minister's biggest failure in 10 years is the failure to arrest price rise. It is not a natural calamity. It is created by the Congress. The common people are suffering ever since the Congress Government came to power.”
His party colleague Piyush Goyal blamed the UPA Government for growing unemployment, reduced investments, high inflation and increasing external debt.
Samajwadi party leader Naresh Agarwal wanted the Finance Minister to release the financial allocation to Uttar Pradesh and assure that farmers will not face scarcity of fertilisers due to Syria situation.