The government plans to take some “hard decisions” to trim wasteful expenditure and curb the import of non-essential items to deal with the stressed economic situation, although there will be no hasty increase in petrol and diesel prices.
“We are going through a period of stress...We have to take some hard decisions. Many of these measures are being taken and many measures will be announced in the next few days and weeks. Some measures to curb import of inessential items will also be announced,” Finance Minister P Chidambaram said while winding up a debate on the Appropriation Bill in the Rajya Sabha.
In a prelude to this move of tackling non-essential imports, the government last month slapped a 36 per cent duty on import of flat-screen televisions by air travellers.
The government is battling to contain the current account deficit at $70 billion or 4.8 per cent of the GDP and combat rupee volatility.
“When you are facing a gloomy situation, wasteful expenditure has to be curbed...You call it austerity measures, you call it cut in non-plan expenditure...while we must continue to spend and continue to find money for productive investment,” he said.
The rupee has shown improvement in the past few days, Chidambaram said, but added that for the moment he is keeping his fingers crossed.
“We are fighting many unknown factors in the currency markets. Yes, the currency has appreciated in last 3-4 days. But I keep my fingers crossed.”
Since April this year, the country’s foreign currency assets have plunged by $12.32 billion to $247 billion, the biggest fall in recent times, as the central bank has been dipping into its foreign exchange reserves to defend the rupee that nearly breached the 69-mark to the dollar.
On the concerns expressed by members of Parliament on hiking fuel prices, Chidambaram said, “No decision has been taken. No decision would be taken hastily and certainly no decision will be taken without weighing the pros and cons of the larger public interest.”