Days after she supported the government’s reform measures at a public rally here, Sonia today exhorted her party leaders to explain to the people the “compulsions” behind the “difficult decisions”.
Addressing the party’s day-long “samvad baithak” (dialogue session) which was attended by Congress Working Committee members and union ministers at Surajkund, Sonia said: “Due to the prevailing serious situation, our government had to take some decisions that have hurt the common man. The challenge before us is to clearly tell the people about our compulsions and explain the reasons for the difficult decisions.”
That the ruling party has finally come around to accepting the government’s views about rising fiscal deficit was evident. Senior leaders like Digvijaya Singh and Pawan Singh Ghatowar are reported to have raised the issue of petroleum subsidies and suggested differential diesel pricing mechanism for those driving SUVs and those driving tractors. They asked why a scooterist should feel he is paying more (for petrol) than what a SUV owner pays (for diesel).
In the backdrop of the Himachal Pradesh Assembly elections, which saw the BJP focussing on the issue of LPG cylinders, many party leaders demanded that the cap should be increased to 12 subsidised cylinders per household per year. Petroleum Minister M Veerappa Moily said he would discuss the issue with the Prime Minister and Finance Minister P Chidambaram.
At this point, said sources, Ahmed Patel, political secretary to the Congress president, interjected to say that Moily should be told to be mindful of the timing of any increase in prices. Digvijaya Singh was learnt to have suggested that people earning more than Rs 1 lakh per month should not be given any subsidy for LPG cylinders.
Earlier, seeking to convince his party colleagues about the need for economic reforms, the Prime Minister said the government has often been criticised for its excessive focus on growth rate. While accelerating economic growth rate is not an end in itself, he said that it is necessary to get resources for welfare schemes like NREGS, midday meal scheme, etc.
Stating that fiscal deficit is a major problem in the path of fast economic growth, the PM said efforts have to be made to “reduce government expenditure” and increase government revenue. Subsidies are a crucial component of government expenditure as the country spends 3.2 per cent of the GDP on food, fertiliser and petroleum subsidies.
Flagging the issue of constraints on the supply side in the form of delayed “clearances” and cheap credit, the PM advocated the need to create a conducive environment for both domestic and foreign investors by expediting decisions. “Many a time, complaints are received that forest and environmental regulations have become an obstacle to development. The need is to progress while maintaining balance,” he said.
Seeking to dispel the notion about her ministry blocking investment inflows, especially in the wake of her objection to the National Investment Board, environment minister Jayanthi Natarajan said the MoEF had given clearance for 2.10 lakh MW power projects but they were still stalled. She is reported to have said that while she is not against investment, her ministry’s regulatory powers should not be taken away.
Chidambaram was reported to have dwelt at length on the reasons for the current economic situation. “In matters of economic reforms, we have to be careful that there should be no controversy,” Congress general secretary Janardan Dwivedi quoted him as saying.
The Finance Minister was also reported to have spelt out the steps being taken to overcome the sense of stagnation in the economy, including fiscal consolidation, stabilising the value of rupee and attracting foreign investments.