Prime Minister Narendra Modi Saturday warned of “tough decisions” over the next couple of years to nurse India’s ailing economy back to good health, lamenting the precarious conditions the BJP-led government has inherited from the UPA regime.
“Taking tough decisions and strong measures in the coming one or two years are needed to bring financial discipline, which will restore and boost the country’s self-confidence,” Modi said addressing BJP workers here.
Modi’s remarks come barely four weeks before finance minister Arun Jaitley presents the new government’s first budget for 2014-15 in the second week of July.
The budget will hold out cues on how the government plans to deliver on some of its poll promises — including jobs, price control and speedier implementation of projects — to revive the economy from its current quarter-century slump and breathe life into the waning industrial sector.
The Indian economy, which till recently was touted to emerge as a regional titan rivalling populous neighbour China, both in terms of size and rapidity of expansion, is now snowed under a raft of problems.
It has grown at sub-5% for two successive years for the first time since 1986. Industrial activity remains wobbly, despite the rebound in April by 3.4%, and at 8.3% retail inflation remains close to the worrisome 10% mark.
Focus will also be on how the new finance minister balances the budget books
“I have taken over the reins of the country in circumstances where there is nothing left behind by the previous government. They left everything empty. The country’s financial health has hit the bottom,” Modi said.
However, in the short run, his government’s tough measures may not go down well with everybody, he said.
“I am well aware my steps may dent the immense love the country has given me. But when my countrymen realise these steps will result in getting financial health back, I will regain that love,” the Prime Minister said.
India is also keeping a close watch on the unrest in Iraq.
The equity and currency markets slumped while oil prices touched a nine-month high on Friday amid fears of oil supply concerns.
Iraq is India’s second-largest oil supplier after Saudi Arabia. High crude oil prices can lead to higher petrol and diesel prices in India, which imports 75% of its crude requirements. Costly fuel could fan inflation and knock up prices of most goods.
“We need to take action wherever required,” Modi said. “We won’t be helping the country by praising Modi and praising BJP. There is no guarantee that just singing praise of Modi would improve the situation. We need to take harsh measures to improve the financial situation.”
He later tweeted, “Time has come to take tough decisions in the interest of the nation.”
Modi said it was a misconception that people in government were not willing to work for the country. “In a government set-up, most officials would like to do something for the country. They are ready to work. This is what I can say from my experience as PM in the last 15 days.”
Hitting back at the PM for his remark that the Congress-led government had left him with nothing, party spokesperson Shakeel Ahmed said, “It seems Modiji still can’t believe he is PM. He is still in campaign mode. He is the Prime Minister of the country. He should act as the PM, not as a leader of opposition.”(With agency inputs)