New Delhi: Under attack in Parliament over the sliding rupee, Prime Minster Manmohan Singh conceded that the country was facing a “difficult” economic situation and has to reckon with the uncertainties created by global factors like tensions in Syria.
The Lok Sabha witnessed repeated adjournments amid the Opposition demands for an immediate statement from the Prime Minister, while the issue created uproar in the Rajya Sabha for some time. Both the Left and AIADMK members even trooped into the Well in the Lok Sabha.
“It cannot be denied that the country is faced with a difficult economic situation,” the Prime Minister said in the Rajya Sabha in impromptu remarks.
Domestic, external factors
“There are several causes (for the economic woes). I do not deny some domestic factors too are responsible,” he said, listing some external factors that have impacted rupee and the Indian economy like the US monetary stance and problems created by tensions in Syria and its “inevitable consequences on oil prices’’.
“We have to reckon with these uncertainties,” Singh said, adding that he needed “sometime to reflect” on them. “I would be happy to make a statement tomorrow,” he added.
As soon as Rajya Sabha met for the day, Leader of the Opposition Arun Jaitley raised the issue of depleting value of the rupee, which has fallen 20 per cent against the U.S. dollar this year and already breached 68 mark and said there was “panic” as people did not know at what level the devaluation would stop.
Inflationary pressure would be twice as the rising food prices, coupled with imported inflation in the form of rising oil prices in the global market, would lead to a serious situation, he said.
“It is a panic situation... we want to know from the Prime Minister what he has in his mind for reviving the situation. In a democracy, the buck stops at the Prime Minister and not disappear,” he said, adding, “Prime Minister must take the House and the country into confidence”.
Sitaram Yechury (CPI-M) said that the country has “come back to square one” after 22 years of reforms under Manmohan Singh as the economy is facing the same crisis as it did in 1991.
In the Lok Sabha, several political parties slammed the Government over the sliding rupee, which has breached the 68 to a U.S. dollar mark.
When the House met for the day, Leader of the Opposition Sushma Swaraj sought Speaker Meira Kumar’s permission to speak during Question Hour on the continuous fall in the value of the rupee.
“Day before yesterday there was a debate in the House on the state of the economy in which the Finance Minister gave a long speech enumerating 10 steps and maintained that if these are implemented the economy will improve.
“After this the confidence of the country and the investors should have increased by at least 10-20 paise but it has actually fallen,” Swaraj said.
Rubbishing Finance Minister P Chidambaram’s contention that the economy is in a bad shape as the country’s polity is divided, the BJP leader said before accusing the Opposition, the Government should bury its differences as it is a divided House.
“Government is not able to take decisions as the Cabinet does not have unanimity on issues,” she said.
BJP also charged that Chidambaram has in a subtle manner put the blame for the economy on his predecessor Pranab Mukherjee. “The Finance Minister wanted to pass the blame on his predecessor who is now the President of India,” she said.
She alleged that whenever the Government faces a problem it seeks to hold allies like A. Raja (DMK) and Sharad Pawar (NCP) responsible.
“The country’s reputation is attached to the rupee...We want a statement from the Prime Minister, who is a renowned economist. Those having Ph.Ds in economics are not able to handle the economy,” Swaraj said, adding that the PM should clarify whether the rupee slide will stop or it will continue to fall.