Prime Minister Manmohan Singh Friday night in his address to the nation, defending the economic reforms said the recent decision were made to revive “investor confidence domestically and globally”. “We are at a point where we can reverse the slowdown in our growth.

We need a revival in investor confidence domestically and globally. The decisions we have taken recently are necessary for this purpose,” PM said.

“At times, we need to say “No” to the easy option and say “Yes” to the more difficult one. This happens to be one such occasion. The time has come for hard decisions. For this I need your trust, your understanding, and your cooperation,” he appealed to the nation. 

Dr. Manmohan Singh said: “I am speaking to you tonight to explain the reasons for some important economic policy decisions the government has recently taken. Some political parties have opposed them.

You have a right to know the truth about why we have taken these decisions.” He said that no government likes to impose burdens on the common man. “Our Government has been voted to office twice to protect the interests of the aam admi,” he said.

Acknowledging that it was the responsibility of the government to defend the national interest and protect the long term future of the people, PM said “this means that we must ensure the economy grows rapidly, and that this generates enough productive jobs for the youth.”

Pointing out that India too have been affected by the global economic slowdown, PM however said “we have been able to limit the effect of the global crisis.”

On diesel price hike and cap on LPG: With regard to hike in diesel prices and the cap on LPG cylinders, PM said: “We import almost 80% of our oil, and oil prices in the world market have increased sharply in the past four years.

We did not pass on most of this price rise to you, so that we could protect you from hardship to the maximum extent possible”. As a result, he said subsidy on petroleum products has grown enormously. 

“Where would the money for this have come from? Money does not grow on trees. If we had not acted, it would have meant a higher fiscal deficit, that is, an unsustainable increase in government expenditure vis-à-vis government income. If unchecked, this would lead to a further steep rise in prices and a loss of confidence in our economy,” he added. 

Explaining why the government had put a cap of 6 subsidized cylinders per year, PM said: “Almost half of our people, who need our help the most, actually use only 6 cylinders or less.

We have ensured they are not affected. Others will still get 6 subsidized cylinders, but they must pay a higher price for more.” He however asserted that the government did not touch the price of kerosene “which is consumed by the poor”.

Referring back to the 1991 crisis, PM said: “Nobody was willing to lend us even small amounts of money then. We came out of that crisis by taking strong, resolute steps. You can see the positive results of those steps. We are not in that situation today, but we must act before people lose confidence in our economy.”

FDI on retail: While explaining the decision to allow foreign investment in retail trade, PM said: “We should also remember that the opening of organized retail to foreign investment will benefit our farmers. The growth of organized retail will also create millions of good quality new jobs.” He said “some think it will hurt small traders.

This is not true.” “In a growing economy, there is enough space for big and small to grow. The fear that small retailers will be wiped out is completely baseless,” he asserted.

“I promise you that I will do everything necessary to put our country back on the path of high and inclusive growth. But I need your support. Please do not be misled by those who want to confuse you by spreading fear and false information.

The same tactics were adopted in 1991. They did not succeed then. They will not succeed now. I have full faith in the wisdom of the people of India,” PM concluded.

TMC officially out of UPA; 6 ministers quit
Trinamool Congress (TMC) party Friday formally withdrew support to the Congress-led UPA government Friday and six of its central ministers including Union Railway minister Mukul Roy resigned from the government in protest against FDI in retail and diesel price hike.

Mukul Roy and five ministers of state-- Saugata Roy, Sisir Adhikari, Mohan Jatua, Sultan Ahmed and Sudip Bandopadhyay called on the prime minister and submitted separate resignation letters.

TMC MPs also met President Pranab Mukherjee and handed over a letter withdrawing support to the UPA. The Trinamool has 19 members in the 545-seat Lok Sabha.

“We met the Prime Minister at 4 p.m. and submitted individual letters of resignation to him. Later we met President Pranab Mukherjee and gave him our official letter withdrawing support to the UPA government. He has accepted it,” Trinamool Congress leader Saugata Roy told mediapersons outside the Rashtrapati Bhavan. The letter of withdrawal of support to UPA government was signed by Mukul Roy.

Will support UPA to keep out communal forces: Mulayam
IANS Adds: Samajwadi Party (SP) chief Mulayam Singh Yadav Friday came to the rescue of the ruling UPA coalition, which was reduced to a minority following the withdrawal of support by the Trinamool Congress, saying he would provide support to the central government to “keep communal forces at bay”.

“We will support the UPA to keep the communal party away from the government,” said Yadav, who has emerged as the new saviour of the UPA government.

“If we will not support the Congress, then it is possible that the communal party will come in power. So we are supporting the Congress,” Yadav told supporters here.

However, the relief to the Congress was qualified by SP chief’s bid to resurrect the Third Front and his opposition to the newly-launched reforms. After Trinamool Congress’ exit, the ruling coalition is left with 254 MPs. Yadav, whose party has 22 Lok Sabha members, can save the government for now.