PM vows to revive economy, BJP says it's 'only promises'
India is committed to bringing its current account deficit under control and reducing demand for gold and petroleum products, he said at a conference on New Delhi.
India's economic growth this year will be lower than the budget estimate of 6.5 percent, Prime Minister Manmohan Singh said today, but assured that the government will take all steps possible to address the issue of widening current account deficit.
India is committed to bringing its current account deficit under control and reducing demand for gold and petroleum products, he said at a conference in New Delhi.
"We are committed to bringing the current account deficit under control by addressing the demand side and supply side of the problem. On the demand side we need to reduce the demand for gold and the demand for petroleum products, the two biggest components of our trade deficit," he said.
He also said the recent steps taken by the government to curb import of gold has show some results as the imports declined sharply in June.
He said the country is going through a difficult period and that the recent volatility in the forex market was a cause for concern.
He, however, said the rupee's depreciation was in line with currencies of the emerging markets like Brazil and South Africa. He attributed the reason for the volatility to the wide current account deficit in India's balance of payments.
He promised more steps to attract foreign direct investments into the country.
Prime minister said the rupee's depreciation has increased the revenue loss on diesel sale. Economists have already concerns that the government will find it difficult to meet its fiscal deficit target of 4.8 percent this year as the under-recoveries of the oil marketing companies have been on a rise after the rupee's about 10 percent fall against the dollar in the last more than a month.
He said though the target for the CAD is 22.5 percent of GDP, it is not possible to bring it down to this level in one year.
"We will take all measures, fiscal, monetary and supply side measures to address the problem of the current account deficit," he said
He also sought to quell fears that the recent steps taken by the RBI is signalling arate increase by saying the central bank can reverse these steps once the rupee stabilises.
He also listed out the measures the UPA government has taken over the last few months to address the economic slowdown.
"We have acted on many fronts," he said.
Comparing the economic growth during the UPA and NDA, he said poverty reduction was much higher during the Congress rule. "Poverty declined 0.75 percent per year before we came to power. After we came to power, it declined 2 percent per year," he said.
"The average growth rate in the 8 years of the UPA from 2004-05 to 2012-13 was 8.2 percent per annum. This is much better than the 5.7 percent reached in the previous 8 years," he said, listing out the achievements of the UPA government.
The comparison sparked strong reaction from the main Opposition Bharatiya Janata Party.
Senior BJP leader Yashwant Sinha saidthe PM is not talking about last year's growth rate but an average of the last eight years. "He is being less than intellectually honest in comparing NDA's period with UPA," Sinha said.
He also alleged that the prime minister's speech held out no hope as he has not suggested any concrete steps.
"The whole world knows economy is in crisis and PM offers no hope," Sinha said.
"This is a promising government, promising PM, because all they do is make promises," he added.
With inputs from Reuters
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