New Delhi: Prime Minister Manmohan Singh, in an address to the nation on Friday evening, sought to explain the recent important policy decisions made by the government to put India's flailing economy back on track. Explaining that India's fiscal deficit was ballooning and its subsidy bill was an astounding Rs 1 lakh 40 thousand crore last year, he said that the figure would have reached 2 lakh crore this year if steps hadn't been taken.
"The world is not kind to those who do not tackle their own problems. Many European countries are in this position today. They cannot pay their bills and are looking to others for help. They are having to cut wages or pensions to satisfy potential lenders," said the PM.
Pointing out that the diesel price was hiked by a mere Rs 5 when it should have actually been raised by Rs 17, the PM said that the UPA government, that had been elected on the vote of the 'aam aadmi', was determined not to put more financial burden on him despite the gloom in the economy.
The next few months will be significant as the UPA plans to introduce bills on pension reforms, land acquisition, direct and indirect taxes.
"We raised the price of diesel by just Rs 5 per litre instead of the Rs 17 that was needed to cut all losses on diesel. Much of diesel is used by big cars and SUVs owned by the rich and by factories and businesses. Should government run large fiscal deficits to subsidise them?" he asked.
"No government likes to impose burdens on the common man. Our Government has been voted to office twice to protect the interests of the aam admi," he said, adding, "At the same time, it is the responsibility of the government to defend the national interest, and protect the long term future of our people. This means that we must ensure that the economy grows rapidly, and that this generates enough productive jobs for the youth of our country. Rapid growth is also necessary to raise the revenues we need to finance our programmes in education, health care, housing and rural employment."
His address, which was more of an economist speaking to the nation rather than a politician, was hailed by India Inc.
Noted industrialist Adi Godrej said, "The speech by the Prime Minister was a very balanced speech."
Meanwhile, vice chairman and managing director of Bharti Enterprises Rajan Bharti Mittal called it a signal of the reforms to come.
"This is a signal of the reforms to come. We should welcome the decision taken by the government," said Mittal.
The Congress party also rallied behind the Prime Minister saying he needs to put the economy back on track, and had explained why the tough steps taken by the government were necessary.
Minister of State (PMO) V Narayansamy hit out at the Opposition for saying that the Prime Minister sounded like a CEO in his speech. He said, "Well the PM has to behave in a business like manner. He needs to put the economy back on track with solid professional decisions."
On Friday night, all that the PM did was trying some straight-talking with India.
The success or otherwise of this strategy, however, say experts, is dependent on exactly what kind of populist measures can the government come up with to satisfy the non-corporate, non-urban middle classes.
In this regard, the next few months will be significant as the UPA plans to dole out more economic reforms. These include pension reforms, the land acquisition bill, insurance, direct taxes and indirect taxes.