Hard decisions on economy soon: PC
In a desperate bid to uplift the economy, the Centre is likely to take some hard decisions, including cuts in wasteful expenditure and curbs on import of non-essential goods.
Dismissing rumours of another hike in prices of petrol and diesel, Finance Minister P Chidambaram on Saturday said in the Rajya Sabha that no hasty decision would be taken.
“We are going through a period of stress. We have to take some hard decisions. Many of these measures are underway and many will be announced in the next few days and weeks. Some measures to curb import of non-essential items will also be announced,” Chidambaram said while winding up a debate on the Appropriation Bill.
He, however, did not elaborate on the essential goods that would be banned from import. On curtailing expenditure, the Finance Ministry is already working and has sought a detailed report from various ministries,” he added.
On the rupee’s performance, he said the domestic currency had shown improvement in the past few days. “We are fighting many unknown factors in the currency markets. Yes, the currency has appreciated in the last 3-4 days. But I keep my fingers crossed,” he said.
The rupee, which fell to almost 69 against the US dollar last month, has started strengthening on the back of announcements by new RBI Governor Raghuram Rajan. The rupee rose 77 paise on Friday to close at Rs 65.24, the highest level in almost two weeks.
Chidambaram said steps had been taken to increase foreign fund flows and more are being planned.
Chidambaram also spoke about the stimulus packages, days after blaming them for the current economic mess, which were seen as an attack on his predecessor Pranab Mukherjee, who is now the President.
The minister said that like India, many countries had provided stimulus packages to help the industry tide over the impact of the global financial meltdown of 2008. The stimulus, he said, had its consequences on the fiscal deficit and the current account deficit (CAD).
Referring to price rise, Chidambaram said although Wholesale Price Index inflation was about 5-6 per cent, retail inflation was high. Inflation had to be tackled by addressing supply-side constraints and removing distribution bottlenecks.
Parliament authorised the government to withdraw an additional Rs 7,500 crore from the Consolidated Fund to meet the funds needs of various schemes, including Rs 1,000 crore each for setting up a “Nirbhaya fund” for the safety of women and for a women's bank.
"Additional cash allocation is very small," Chidambaram said, seeking Rajya Sabha's nod for the Appropriation (No 4) Bill, 2013. The bill was passed in the Lok Sabha on September 5.