Friday, 21 September 2012

PM calls for trust and support; defends FDI, diesel price hike

PM calls for trust and support; defends FDI, diesel price hike
Clean Media Correspondent

New Delhi, Sept 21 (CMC) Prime Minister Manmohan Singh Friday defended his government's fresh economic reforms, saying these were needed to boost investor confidence domestically and globally. In a nationally televised address, the Prime Minister accused the opposition of misleading the people and said the time had come to embrace "hard decisions" to revive the country's economy.

"The time has come for hard decisions. For this I need your trust, your understanding and your cooperation," he said, comparing the situation with what prevailed in 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 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 in a year, the Prime Minister said "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.
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."
He explained the decision to allow foreign investment in retail trade by saying that "we should also remember that the opening of organised retail to foreign investment will benefit our farmers. The growth of organised retail will also create millions of good quality new jobs."
He said that "in a growing economy, there is enough space for big and small to grow. The fear that small retailers will be wiped out is completely baseless."
He urged that in order to continue on the path of growth he needs the trust, understanding, and cooperation of aam aadmi.
"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. Please do not be misled by those who want to confuse you by spreading fear and false information. The same tactics were adopted in 1991. They did not succeed then. They will not succeed now. I have full faith in the wisdom of the people of India," he said.

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