M A I N   N E W S

Domestic, global factors behind economic turmoil: PM
Sanjeev Sharma/TNS

New Delhi, August 29
With the Opposition targeting the government over the free fall of the rupee in both Houses of Parliament, Prime Minister Manmohan Singh today acknowledged that the country was facing a difficult economic situation.

Angry Opposition members said there was a panic-like situation over the currency that had come close to touching the 69-mark to the dollar, as it was also a symbol of national prestige.

The Lok Sabha had to be adjourned several times in the morning session as members demanded an immediate statement from the Prime Minister. Left and AIADMK members even trooped into the well in the Lok Sabha. Opposition parties expressed anger that there was talk now of mortgaging gold to rescue the economy which was a worrisome situation. The PM will make a statement on the economic situation in Parliament tomorrow.

In his brief remarks in the Rajya Sabha, the PM, while conceding that the economic situation was difficult, added that external and domestic factors were responsible for it.

“It cannot be denied that the country is faced with a difficult economic situation. There are several causes for the economic woes. I do not deny some domestic factors are also responsible,” he said. He cited external factors that have impacted rupee and Indian economy like the change in US monetary stance and problems created by tension in Syria and its “inevitable consequences on oil prices”.

“We have to reckon with these uncertainties,” he said, adding that he needed “sometime to reflect” on them. “I would be happy to make a statement tomorrow.” In some relief to the government, the rupee, after its huge fall yesterday that led to the onslaught by the Opposition parties, recovered sharply to close at 66.55-mark on the back of RBI’s move to provide dollars directly to oil companies. The stock markets also moved up 400 points on the back of the improvement in the rupee.

As soon as the Rajya Sabha proceedings began, Leader of the Opposition Arun Jaitley raised the issue of depleting value of the rupee and said there was “panic” as people did not know at what level the devaluation would stop.

Jaitley said rising food prices, coupled with imported inflation in the form of rising oil prices in the global market would lead to a serious situation. In the Lok Sabha, many political parties slammed the government over the sliding rupee. Leader of the Opposition Sushma Swaraj raised the issue during question hour and expressed concern over the fall in the value of rupee.

Dismissing Finance Minister P Chidambaram’s contention that the economy was in bad shape because the country’s polity was divided, the BJP leader said before accusing the Opposition, the government should bury its differences as it was a divided House itself.

Swaraj also charged that Chidambaram had in a subtle manner put the blame for the economic situation on his predecessor Pranab Mukherjee.





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