Economy is stressed, hard decisions soon: Chidambaram

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Finance Minister P Chidambaram. File Photo
File Photo

New Delhi, Sept 7 (PTI): The government plans to take some “hard decisions” to trim wasteful expenditure and curb the import of inessential items to deal with the stressed economic situation, although there will be no hasty increase in petrol and diesel prices.

“We are going through a period of stress… We have to take some hard decisions. Many of these measures are being taken and many measures will be announced in the next few days and weeks. Some measures to curb import of inessential items will also be announced,” Finance Minister P Chidambaram said while winding up a debate on the Appropriation Bill in the Rajya Sabha.

“When you are facing a gloomy situation, wasteful expenditure has to be curbed…You call it austerity measures, you call it cut in non-plan expenditure…while we must continue to spend and continue to find money for productive investment,” he said.

On concerns expressed by members of Parliament on fuel prices, Chidambaram assured them the government will not take any decision in haste to increase diesel and petrol prices. “No decision has been taken. No decision would be taken hastily and certainly no decision will be taken without weighing the pros and cons of the larger public interest,” he said.

On the rupee, the Finance Minister said that the domestic currency had shown improvement in the past few days: “We are fighting many unknown factors in the currency markets. Yes, the currency has appreciated in last 3-4 days. But I keep my fingers crossed.”

The rupee, which fell to almost 69 against the US dollar in August, has started strengthening on the back of announcements by new RBI Governor Raghuram Rajan. The rupee rose 77 paise yesterday to close at 65.24, the highest level in almost two weeks. Chidambaram said that steps had been taken to increase foreign fund flows and more were being planned.

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