You are here:HomeEconomy

We have to take decisions for economic growth: Manmohan Singh

close

New Delhi:

In a strong 15-minute speech this evening, the Prime Minister explained to the nation the reforms that have hurtled his government into a minority.

He prefaced it by saying that the people had a right to know why his government took these decisions and that no government liked to burden the aam aadmi or common man. The Prime Minister said his was a government of that common man and asked his people to trust him and strengthen his hand as “the time has come for hard decisions".

The speech came hours after Mamata Banerjee's Trinamool Congress, the second-largest member of his coalition, withdrew support over the government's decision to increase diesel prices and open up the retail sector to foreign mega-stores like Wal-Mart, and the PM explained the rationale behind taking those tough decisions. “World fuel prices are going up, we have tried to insulate you. Subsidies on fuel are very large, though, and the subsidy bill  would have shot up to more than 2 lakh crore. Where will we find the money for this? Money does not grow on trees,” he said.

He also sought to allay fears that FDI in retail would wipe out small retailers. His government, he said, was imposing conditions to ensure needs and interests of farmers and small retailers were protected. “In a growing economy, there is space for big and small to grow … Farmers will benefit, they will get better rates for their produce. The growth of organised retail will also create millions of good quality new jobs,” he promised.

And in an obvious reference to Mamata Banerjee’s adamant stance that FDI in retail must be withdrawn, the PM underscored that every state had been given the opportunity to choose whether or not to implement FDI in retail, but said, “No state has the right to prevent others from introducing retails in reform to help its farmers and shopkeepers."

The PM hit out at political parties that have opposed these reforms saying, “Don't be misled by those who want to confuse you by spreading fear and false information. I know what happened in 1991 and I would be failing in my duty as PM of this great country if I did not take strong preventive action. Misinformation was used in 1991 as well when we brought in reforms but  those behind it did not succeed then, they will not succeed now.”

Speaking first in Hindi, the PM explained that if fiscal deficit went up any further, investors would lose confidence at home and abroad. Other countries, he said, needed bailouts because they did not take the required steps and he was determined that  India would never be close to this situation. “But I can only be successful if you understand why we are doing these reforms,” he said.

These reforms, Dr. Manmohan Singh said, were necessary in difficult economic times. “The government has the responsibility to work in the interest of the country and people for progress. Creating employment is important, especially in rural areas. The challenge is to implement this during a  world recession. To some extent, we have been successful,”  and also said, “It is my responsibility to take tough decisions in our larger interest.”

Opposition parties have dismissed the PM’s attempt to reach out. “Sitaram Yechury of the CPM said there was “nothing new in the PM's speech.” And the BJP ‘s Prakash Javadekar said, “If PM wanted to show intent, he should have acted against corruption. Instead he has burdened the common man.”  And Kakoli Ghosh Dastidar of the Trinamool Congress, which brought this moment to pass, said, “The PM is a gentleman, a learned man. But the Congress has no touch with the common man, though they keep talking about aam aadmi. Cut in subsidy will create problems for the middle class.”

Industry though is cheering Dr. Singh’s reforms and wants more. “A very balanced address, he clearly explained that these steps were very necessary. His comparison with 1991 was very apt. I am impressed with the action last week and today's speech; the government has good support. Mamata’s pullout may strengthen the government – the stock market went up and the rupee appreciated. A stronger rupee will lead to lower inflation,” said Adi Godrej, chairman of the Godrej Group and president of CII.

Kiran Majumdar Shaw, CMD Biocon, welcomed the speech as “a very cogent explanation of the urgency for reforms. He reached out to the people to explain how he can't afford India to reach a situation like some European countries where people are losing their jobs. I wish he had done this earlier. We can't have a prime minister who keep large periods of silence.”

The PM’s speech came at the end of a long day of political drama. Before he spoke to the nation, he accepted the resignation of the six ministers of Mamata Banerjee’s Trinamool Congress, bringing a turbulent chapter to a close. Even the opposition concedes that the ruling UPA is not in any imminent danger after Ms Banerjee’s exit because regional heavyweights Mulayam Singh Yadav and Mayawati will continue to lend external support despite differences over the economic reforms the Prime Minister has introduced.

"Unfortunately, the government will use its survival as an endorsement of its policies," said Left leader Sitaram Yechury.

Senior ministers have pointed out that between them, Mr Yadav and Mayawati contribute 43 MPs, taking the UPA safely past the 272 votes it needs to remain in power.  A vote of confidence, they said, is therefore not required. The Manmohan Singh government meanwhile is clear that this phase of reforms is necessary and here to stay, though minister in the PMO, V Narayanasamy did say that the government would push reforms that could be “implement without much difficulty".

New reforms cleared on Friday included slashing a tax on overseas borrowing by Indian firms and implementing a scheme to encourage individuals to invest in the stock market. The government also hopes to allow more foreign investment in the insurance sector and reduce sugar subsidies for the poor - the price of sugar available under the Public Distribution System or PDS could go up by Rs. 3. That may not go down well with allies like Mr Yadav and the DMK, who have objected to last week's increase in diesel prices and the cap on subsidised cooking gas for households.

In a 15-minute speech this evening, the Prime Minister explained to the nation the reforms that have hurtled his government into a minority.

He began by saying that the people have a right to know why his government took these decisions and that they should rest assured that the government did not want to burden the aam aadmi or common man. The Prime Minister said his was a government of that common man and asked his people to trust him and strengthen his hand.  

Dr Singh explained the rationale behind taking tough decisions on fuel subsidy. “World fuel prices are going up, we have tried to insulate you. Subsidies on fuel are very large, though, and the subsidy bill  would have shot up to more than 2 lakh crores. Where will we find the money for this?  Money does not grow on trees,” the PM said.

The PM’s speech came hours after Mamata Banerjee's Trinamool Congress, the second-largest member of his coalition, withdrew support over the government's decision to increase diesel prices and open up the retail sector to foreign mega-stores like Wal-Mart.

He hit out at political parties that have opposed reforms saying, “Don't be misled by those who want to confuse you by spreading fear and false information. I know what happened in 1991 and I would be failing in my duty as PM of this great country if I did not take strong preventive action. Misinformation was used in 1991 as well when we brought in reforms but  those behind it did not succeed then, they will not succeed now.”

He sought to allay fears that FDI in retail would wipe out small retailers. His government, he said, was imposing conditions to ensure needs and interests of farmers and small retailers were protected.

“In a growing economy, there is space for big and small to grow …Farmers will benefit, they will get better rates for their produce. The growth of organised retail will also create millions of good quality new jobs,” he promised.

In an obvious reference to Mamata Banerjee’s adamant stance that FDI in retail must be withdrawn, the PM underscored that every state had been given the opportunity to choose whether or not to implement FDI in retail, but said, “No state has the right to prevent others from introducing retails in reform to help its farmers and shopkeepers.

Speaking first in Hindi, the PM explained that if fiscal deficit went up any further, investors would lose confidence at home and abroad. Other countries, he said, needed bailouts because they did not take the required steps and he was determined that  India would never be close to this situation. “But I can only be successful if you understand why we are doing these reforms,” he said.

These reforms, Dr Manmohan Singh said, were necessary in difficult economic times. “The government has the responsibility to work in the interest of the country and people for progress. Creating employment is important, especially in rural areas. The challenge is to implement this during a  world recession. To some extent, we have been successful,”  and also said, “It is my responsibility to take tough decisions in our larger interest.”

The PM’s speech came at the end of a long day of political drama. Before he spoke to the nation, he accepted the resignation of the six ministers of Mamata Banerjee’s Trinamool Congress, bringing a turbulent chapter to a close. Even the opposition concedes that the ruling UPA is not in any imminent danger after Ms Banerjee’s exit because regional heavyweights Mulayam Singh Yadav and Mayawati will continue to lend external support despite differences over the economic reforms the Prime Minister has introduced. "Unfortunately, the government will use its survival as an endorsement of its policies," said Left leader Sitaram Yechury.

Senior ministers have pointed out that between them, Mr Yadav and Mayawati contribute 43 MPs, taking the UPA safely past the 272 votes it needs to remain in power.  A vote of confidence, they said, is therefore not required. The Manmohan Singh government meanwhile is clear that this phase of reforms is necessary and here to stay, though minister in the PMO, V Narayanasamy did say that the government would push reforms that could be “implement without much difficulty.”

New reforms cleared on Friday included slashing a tax on overseas borrowing by Indian firms and implementing a scheme to encourage individuals to invest in the stock market. The government also hopes to allow more foreign investment in the insurance sector and reduce sugar subsidies for the poor - the price of sugar available under the Public Distribution System or PDS could go up by Rs. 3. That may not go down well with allies like Mr Yadav and the DMK, who have objected to last week's increase in diesel prices and the cap on subsidised cooking gas for households.

Since Ms Banerjee announced her decision to drop out of the government earlier this week, Mr Yadav had hinted but not committed that his support to the government will continue. Today, he ended the suspense for the Congress by announcing that he will stand by the coalition while opposing reforms like FDI in retail. He also said that his allegiance with the UPA is prompted by his commitment to keeping the "communal forces" of the BJP at bay.

Mr Yadav has always been a parlous partner. His Samajwadi Party was voted into power in Uttar Pradesh earlier this year, a victory enabled by his son, Akhilesh, who is now chief minister. Mr Yadav's support at the centre will come with strings attached - his son's government has been soliciting large financial packages and concessions from the UPA. Mr Yadav's stand on reforms will also be guided by his state's votebank, which is likely to position him against the centre.

Dealing with Mayawati for now will be less complicated. After her humiliating defeat by Mr Yadav's party in the Uttar Pradesh elections, she needs time to rebuild her support base, and will therefore help bolster the UPA to avoid early elections.

In a televised address to the nation tonight, the Prime Minister justified the new economic reforms that have hurtled his government into a minority.  “You have a right to know the truth about why we have taken these decisions,” he said on a day when the markets hit a 14-month high.

Sensex, Nifty at 14-month highs

In his 15-minute speech, he  urged the country not to be misled “by those who want to confuse you by spreading fear and false information,”  a reference to the widespread political opposition to his new agenda, and said he needs the “ trust, understanding and cooperation of India” to help reverse the economic slowdown and to create employment."

He also referred pointedly to  track record as Finance Minister and the reforms he initiated  during the global recession of 1991, and said  “strong resolute steps” then had come to India’s rescue then.   
His speech was broadcast hours after Mamata Banerjee and her party, the Trinamool Congress, pulled out over the government’s decisions to increase diesel prices,  cap the supply of subsidised cooking gas to households, and allow foreign mega-stores like Wal-Mart to arrive in India.   

In a thinly-veiled reference to Ms Banerjee, Dr Singh pointed out that state governments can decide not to allow foreign investment in retail. “But one state should not stop another state from seeking a better life for its farmers, for its youth and for its consumers,” he said.

As expected, he expounded on the need to rein in fuel subsidies by increasing diesel prices.

On the cap of six subsidized LPG cylinders per household, he said more than half of India uses less than that quota every year and that poor families would not be affected.

Those reasons have been rejected by Ms Banerjee, whose six ministers met the PM this evening to resign, and then carried onto Rashtrapati Bhawan where they formally notified the President that their party has withdrawn its support to the UPA.  

Even the opposition concedes that the government is not in any imminent danger after Ms Banerjee’s exit because regional heavyweights Mulayam Singh Yadav and Mayawati will continue to lend external support despite differences over the Prime Minister’s new reforms agenda. "Unfortunately, the government will use its survival as an endorsement of its policies," said Left leader Sitaram Yechury.

Senior ministers have pointed out that between them, Mr Yadav and Mayawati contribute 43 MPs, taking the UPA safely past the 272 votes it needs to remain in power.  A vote of confidence, they said, is therefore not required. The Manmohan Singh government meanwhile is clear that this phase of reforms is necessary and here to stay, though minister in the PMO, V Narayanasamy did say that the government would push reforms that could be “implement without much difficulty.”

New reforms cleared on Friday included slashing a tax on overseas borrowing by Indian firms and implementing a scheme to encourage individuals to invest in the stock market. The government also hopes to allow more foreign investment in the insurance sector and reduce sugar subsidies for the poor - the price of sugar available under the Public Distribution System or PDS could go up by Rs. 3. That may not go down well with allies like Mr Yadav and the DMK, who have objected to last week's increase in diesel prices and the cap on subsidised cooking gas for households.

Since Ms Banerjee announced her decision to drop out of the government earlier this week, Mr Yadav had hinted but not committed that his support to the government will continue. Today, he ended the suspense for the Congress by announcing that he will stand by the coalition while opposing reforms like FDI in retail. He also said that his allegiance with the UPA is prompted by his commitment to keeping the "communal forces" of the BJP at bay.

Mr Yadav has always been a parlous partner. His Samajwadi Party was voted into power in Uttar Pradesh earlier this year, a victory enabled by his son, Akhilesh, who is now chief minister. Mr Yadav's support at the centre will come with strings attached - his son's government has been soliciting large financial packages and concessions from the UPA. Mr Yadav's stand on reforms will also be guided by his state's votebank, which is likely to position him against the centre.

Dealing with Mayawati for now will be less complicated. After her humiliating defeat by Mr Yadav's party in the Uttar Pradesh elections, she needs time to rebuild her support base, and will therefore help bolster the UPA to avoid early elections.

Story first published on: September 21, 2012 21:40 (IST)

MORE FROM NDTV

FROM THE WEB

MORE FROM THE WEB
MORE FROM NDTV

For Profit Update,
Follow NDTV on Pinterest

Post your comments:

Social Sharing

Advertisement

Advertisement

 

More From NDTV

More From the WEB

Don't Miss

Advertisement

Market Data provided by © Accord Fintech.
© Copyright NDTV Convergence Limited 2014. All rights reserved.