Prime Minister Manmohan Singh, who has long been criticized for being media shy and for not engaging with the public, defended his economic policy changes in a rare nationally televised address Friday night, explaining the need for the reform measures, including foreign investment in the retail sector, and urged citizens to support them.
“No government likes to impose burdens on the common man,†said Mr. Singh. “At the same time, it is the responsibility of the government to defend the national interest and protect the long term future of our people. This means that we must ensure that the economy grows rapidly, and that this generates enough productive jobs for the youth of our country. Ra pid growth is also necessary to raise the revenues we need to finance our programs in education, health care, housing and rural employment.â€
Since the government announced the new economic measures last week, Mr. Singh's Indian National Congress party has been scrambling for political support after a key ally threatened to leave the Congress-led coalition over the new policies. On Friday, the All India Trinamool Congress made good on its threat, with its ministers tendering their resignations.
In the past, Mr. Singh's feeble attempts at economic reforms were met with roaring resistance from political parties, prompting the Congress party to suspend its decisions. Mr. Singh's speech on Friday signaled a strengthening in his party's resolve.
“I promise you that I will do everything necessary to put our country back on the path of high and inclusive growth,†Mr. Singh said.
Among the changes announced last week were a n increase in diesel fuel prices and a reduction in the number of subsidized cooking-gas cylinders a household can own, as the government sought to rein in the ballooning burden of fuel subsidies.
“Money does not grow on trees,†Mr. Singh said, arguing that these measures were necessary because of the rising deficit. “If unchecked, this would lead to a further steep rise in prices and a loss of confidence in our economy. The prices of essential commodities would rise faster. Both domestic as well as foreign investors would be reluctant to invest in our economy. Interest rates would rise. Our companies would not be able to borrow abroad. Unemployment would increase.â€
The government also decided to allow foreign big-box stores like Walmart and Carrefour to open retail chains in India. This was met by protests from small traders, who said it would affect their livelihoods and undercut corner stores, which make up a major portion of India's retail eco nomy.
Mr. Singh said such criticism was baseless. “In a growing economy, there is enough space for big and small to grow,†said Mr. Singh. He said that foreign investment in organized retail would benefit farmers, reduce the waste of produce through better storage, offer better prices to consumers and create millions of “good-quality†new jobs.
Mr. Singh emphasized that to move more people out of poverty, the country needs more growth.
“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,†he said.
