Tuesday, May 22, 2012

PM Says Tough Decisions Would be Taken: Really?

In a story in The Economic Times, Prime Minister Manmohan Singh talks about making tough decisions. Excerpts from the story below:

"Difficult decisions have to be taken on both spending and revenue mobilisation", he said while speaking at function to mark the completion of third year of the UPA-II government. His statement comes in the backdrop of announcement made by Finance Minister Pranab Mukherjee recently in the Rajya Sabha that government would roll out austerity measures.

But these statements have to be taken with a pinch of salt.

Tough decision have been overdue for more than a year now and could not be taken due to political compulsion. What has changed now? In fact, with the Samajwadi party winning in UP and TMC in Bengal, the political compulsion has gotten worse.

And as for Pranab Mukherjee’s austerity measures, they relate to cost cutting in ministries—cutting back on air travel, foreign travel and the like. This might be worth a couple of hundred crores, while the fuel subsidy bill is supposed to have gone up by more than Rs 40,000 cr due to Rupee depreciation.

With this background, it’s a bit difficult to imagine what kind of measures the government is thinking about and how it’s planning to get them through.