“No need to press the panic button yet on fiscal situation”

Finance Minister Pranab Mukherjee on Wednesday said the government would have to take “unpopular” austerity measures to deal with fiscal problems that the country is currently facing. Expressing concern on the deteriorating global economic environment, he, however, pointed out, that there was no need to press the “panic button” yet.

“I am going to take some sort of austerity measures, regardless of people liking it or disliking it, to convey the signal that we are responding to the situation. But we aren't pressing the panic button,” Mr. Mukherjee said in the Rajya Sabha, while replying to a debate on the Finance Bill, which was passed and returned to the Lok Sabha.

Difficult situation

Mr. Mukherjee, whose statement assumes significance on the day when the BSE Sensex fell below 16,000, pointed out that the international crisis was impacting India.

“This is a difficult situation, the international situation is difficult. Country after country is facing major economic crisis. I shall have to keep in mind it is a difficult scenario...I cannot live in a world which is not real,” he asserted.

The Finance Minister said the government was worried regarding the rising crude prices in the international market, and the declining economic growth that slowed down to 6.9 per cent in 2011-12, down from 8.4 per cent in the previous two years. “I will not hesitate to bite the bullet if it achieves the goal, not if it ends in a fiasco,” he added.

Referring to the crisis in the Euro Zone, and its impact on India, Mr. Mukherjee said: “It is because what has happened, and what was decided by the electors of Greece in defeating a particular political party, raised questions of uncertainty in resolving the Euro Zone crisis, and the package which was worked out by the leaders of Europe, that there is a question mark.

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