On Board the Special Aircraft, June 23: Prime Minister Manmohan Singh on his way back to India after attending the G20 Summit in Mexico's Los Cabos and then the UN sponsored Earth Summit on sustainable development in Rio de Janerio in Brazil answered many questions of journalists ranging from the ongoing economic crisis and fall of rupee to the troubles with the United Progressive Alliance (UPA) allies like Trinamool Congress. Excerpts:
Question: Sir, at G20 India indicated contribution of 10 billion US$ to IMF kitty to sort out Euro crisis but surprisingly even this well intentioned move has been wrongly interpreted in the country. Would you like to say something?
PM: We are members of the International Monetary Fund and we would like the IMF to play an important role in resolving various difficulties that are on the horizon in the international economy and financial system. And if this Fund has to play its requisite role then it has been agreed at Los Cabos that the member countries of the Fund will contribute 450 billion Dollars to enable the IMF to come to the rescue of countries in need. As a responsible member of the international community, it was our bounden duty also to make our contribution. And let me say that before making this announcement I had a discussion among the BRICS leaders and all BRICS leaders have made similar contributions. So I don’t think there is anything wrong in our contributing to the IMF. This contribution will be used only when needed and it will also continue to be part of India’s reserves.
Question: Sir, during your address in Mexico you spent a long time talking about the sharp slowdown in the Indian economy, putting in place transparent and stable policies, correcting some of the inherent constraints and taking tough decisions including controlling subsidies. Do you think equations have changed enough in the run up to the Presidential polls to push forward some of these tough decisions quickly?
PM: We owe it to our country to take all the necessary decisions which would return the country to a high growth path. There are problems with regard to the fiscal management. We will tackle that problem effectively and credibly. There are problems with regard to management of the balance of payments deficit on the current account. Those problems also we will tackle.
Also, I think the events of the last couple of days convince me more than ever before that there are no international solutions to the problems of a country of India’s size, of India’s diversity. So it is obligatory on us, and here I would urge all political parties to work with the Government to restore the momentum of growth that this country is capable of and which this country needs.
Question: I have a question on black money. What was the sense during G20 on black money and has it become irrelevant or has there been any improvement?
PM: It is too early to say one way or the other. The problem is there but there are no magic solutions available. I think it is going to be a slow process.
Question: Are you going to reshuffle your Cabinet soon? Are you going to see some new partners joining UPA?
PM: I think that is a legitimate expectation. You will get to know about it when it takes place.
Question: You said that you are going to take a number of steps to restore confidence in the Indian Economy but three of the most important things are really state subjects- land, energy and water. When we talk to businessmen, they say that without these three things they are unable to proceed with investments. So how does the Central Government propose to resolve issues which can actually be solved by State Governments?
PM: We are a semi federal polity and therefore cooperative federalism makes it incumbent on all political parties, those ruling at the Centre and those ruling in States, to work together to find credible ways and means to get this country moving again on to the high growth path which we have achieved until 2011-12.
Question: Rupee has fallen in last two days to a record low of below 57, the latest update on the monsoon is 26% below normal and our deficits continues to be a challenge. My question to you really is there something that we can expect in days to come and won’t you be a better Finance Minister, in the interim at least?
PM: Who will be a Finance Minister you will get to know when that takes place. As regards to the monsoon, I would hate to speculate but let me say we are well prepared to deal with any contingency. If there is a shortfall of food grains that will not affect the availability of food grains. We have record amount of food stock far in excess of our needs and therefore you can depend upon the Government to ensure that if at all, God forbid, there is a shortfall in production, if there is a semi-drought situation, we are well equipped to meet that challenge.
As far as the Rupee is concerned, we are operating a system which is market based exchange rate. We intervene only to curb violent fluctuations. I am confident that measures that I outlined will return Rupee also to a more stable path.
Question: Indian economy is liberalised for 20 years now of which 5 years you were the Finance Minister and then for 8 years you were the Prime Minister. So you know the economy inside out well. What has gone wrong or right in all these years which is now forcing us to debate once again what has gone wrong in all these years?
PM: Let me say that a lot of things which are not going right, they have their origins outside India. The 2008 financial crisis affected our growth rate. Our growth rate fell from 9% to 6.7% and we recovered in next 2 years but then came the Euro zone crisis and therefore there is a flight of capital from large number of developing countries. Capital in search of safety wants to go to Germany, wants to go to the United States and therefore all developing countries, including China, are experiencing a deceleration of growth rates. Having said that let me say that there have been problems in our own country. We have to work harder than ever before in restoring fiscal balance. We have to work systematically to ensure that the balance of payment problem is managed properly and the climate for foreign investment, both direct and portfolio is also favourably motivated.
Question: To keep UPA united and intact, would you request Mamta Bannerjee to reconsider her decision on supporting Presidential candidature and would you appeal to BJP to withdraw their candidate for the Presidential post?
PM: As soon as we decided upon the nomination of Sh. Pranab Mukherjee, I rang up Sh. L.K.Advani ji, I rang up Smt. Sushma Swaraj ji, I rang up Arun Jaitly ji requesting them to work with the Government and the ruling coalition to ensure that Pranab ji’s election takes place unanimously. As far as the Trinamol Congress is concerned, Trinamol Congress is still part of the UPA and I have still not given up hope that Trinamol Congress will also find its way to support the candidature of Sh. Pranab Mukherjee.