More cuts on the way, warns Finance Minister
PTI NEW DELHI FINANCE Minister Pranab Mukherjee on Wednesday said the government would resort to a fresh spell of austerity measures to deal with the difficult economic situation, but made it clear that he was not pressing the “panic button”.
Winding up a debate on Finance Bill 2012 in the Rajya Sabha, he said India’s growth was intact despite moderation in the Gross Domestic Product (GDP) which dropped to 6.9 per cent in 2011-12, from 8.4 per cent in the previous two years.
“International situation is difficult. Country after country is witnessing economic crisis..
I shall have to keep in mind it’s a difficult world...I cannot live in a world which is not real”, he said. The House later returned the Bill marking completion of the threestage budgetary exercise for 2012-13 by Parliament.
Referring to the eurozone crisis and its impact on India, Mukherjee said the government would resort to some “unpopular” steps to deal with fiscal problems. “I am going to issue some sort of austerity measures... whether people like it or not ... to convey a signal that we are responding to the situation”, he said, adding, “We are not pressing panic button.” Mukherjee, however, did not spell out any austerity measures.
His statement came on a day when the Bombay Stock Exchange Sensex slipped below the psychological mark of 16,000, mainly due to problems in the eurozone countries and other rich nations.
Earlier, Mukherjee said he could not give preferential treatment to West Bengal’s Trinamool Congress-ruledgovernment which has been demanding a special package, even though he himself belongs to it.
He said a committee has been set up to look into problems being faced by three debt-stressed states — West Bengal, Punjab and Kerala.
Replying to a debate on the finance bill in Rajya Sabha, Mukherjee said, “I shall have to keep in mind that I represent West Bengal. Naturally, I will have an obligation to them. But as federal finance minister, I have equal responsibility for all 28 states.” West Bengal has debt burden of Rs 2 lakh crore and it would have received the relief if the Fiscal Responsibility and Budget Management (FRBM) Act, which aims at bringing financial discipline, were passed in 2005 as recommended by the 12th Finance Commission, he said.