New Delhi, Aug 31 (): Claiming to tackle the problem on sudden depreciation of the rupee, Prime Minister Manmohan Singh on Friday said the government would be looking towards other measures to deal with the problem not by reversing the process of reforms or through capital controls.
Seeking political compromise, Dr Singh recommended in both Houses of Parliament for implementing additional difficult reforms such as insurance and pension sector reforms, reduction of subsidies, eliminating bureaucratic red tape and implementing the Goods and Services Tax. He further said that reforms like GST are necessary to bring back growth and also expected States to come to an agreement.
Pointing towards the situation in Syria, the Prime Minister said that the sharp and sudden depreciation of the rupee is due to unexpected and surprising situation in Syria, which led to a setback of capital flows pulling down not only the rupee but also the Turkish Lira, Brazilian Real, the South African Rand, the Indonesian Rupiah including other currencies.
After 2010-11, the condition had worsened mainly on account of huge imports of gold and a higher cost of crude imports and recently of coal, said the Prime Minister. Briefing on export he said that weak demand in our major markets has kept our exports from mounting, which was further knocked down by a fall in iron ore exports. All these factors together made our current account deficit indefensibly huge, said Dr Singh.
Following the hard-hitting statement by Manmohan Singh, the opposition in the Rajya Sabha said that the Prime Minister appeared to search for excuses on the state of the economy as his words imitated pessimism and negativism.
Leader of opposition in Lok Sabha Sushma Swaraj who expressed dissatisfaction over the Prime Minister’s speech said on Twitter, “The Rupee has lost its value. The Prime Minister has lost his grace.” Following heated exchanges in both the houses of parliament, senior BJP leader L K Advani urged President Pranab Mukherjee to suggest the government to hold early Lok Sabha polls.