Country facing hard economic situation: PM

Aug 30 2013, 04:56 IST
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SummaryManmohan Singh said the country is faced with a difficult economic situation.

With falling rupee and rising oil prices casting a shadow over Indian economy, Prime Minister Manmohan Singh on Thursday said the country is faced with a difficult economic situation for which some domestic factors too were responsible. “It cannot be denied that the country is faced with a difficult economic situation,” Singh said after leader of the Opposition Arun Jaitley sought his response on the rupee hitting a life-time low.

“There are several causes (for the economic woes). I do not deny some domestic factors too are responsible,” he said.

Listing some of the external factors that have impacted rupee and Indian economy, Singh said US monetary stance and problems created by tensions in Syria and its “inevitable consequences on oil prices” have played their role. “We have to reckon with these uncertainties,” he said, adding he needed “sometime to reflect” on these.

“I would be happy to make a statement tomorrow,” the Prime Minister said.

Earlier, Jaitley raised the issue of depleting value of the rupee, which has fallen 20% against the US dollar this year and already breached 68 mark.

He said there was “panic” in the country as people don’t know where the devaluation of the rupee will stop. Inflationary pressure will be twice as rising food prices will be coupled with imported inflation in form of rising oil prices in the international market, he said.

Manufacturing growth has been low while services sector has seen expansion drop to 7% from 10% earlier. “In situation like this, what is that government is going to do,” he asked.

Jaitley said finance minister P Chidambaram’s 10-point

plan is economic theory as everyone knows that fiscal deficit and current account deficit have to be cut and exports have to be increased.

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