Worried over deteriorating global economic situation and its impact on India, the government today announced that it would resort to "unpopular" austerity measures to deal with fiscal problems but made it clear there is no pressing of "panic button".
Finance Minister Pranab Mukherjee told the Rajya Sabha that the government needed to deal with difficult situation in wake of the rising prices of the crude oil in international market and said efforts would be made to push growth which declined to a disappointing level of 6.9 per cent in 2011-12.
Mukherjee, who was replying to a debate on Finance Bill at a time when the BSE Sensex dipped below the psychological level of 16,000 mainly on account of global factors, cited this as an example of how the international crisis was impacting India. The House later returned the bill marking completion of the three-stage budgetary exercise for 2012-13 by Parliament.
"This is a difficult world, international situation is difficult. Country after country is facing major economic crisis," he said.
Highlighting the fiscal difficulties being faced by the government, Mukherjee said, "somebody has pointed...that I am going to take a little bit of unpopular steps. I am going to issue some austerity measures..."
Not revealing the nature of the austerity measures he was planning to take, the Minister said, "Some sort of austerity measures (have to be taken) to convey the signal that we are responding to the situation as needed."
At the same time, he said, "I do not want to press the panic button."
Referring to the three-phased austerity measures announced earlier, Mukherjee some of the cabinet colleagues had problems.
"At one point of time not long ago, my ministerial colleagues, particularly, those who are tall and high, became very angry with me when I said you will have to travel in the normal class, 'Y' class, not 'J' class. They said there is no adequate leg space", he said.
Expressing disappointment over moderation in economic growth to 6.9 per cent in 2011-12 from 8.4 per cent in the preceding two years, he said, there are projections by some sections that it might not improve this fiscal.
The government projected a growth rate of 7.5 per cent for 2012-13. "It may be correct or may not be correct, but I am not pinning my hope merely on such assumptions.
"To achieve the higher growth, we have to take certain steps," the Minister said, adding some of these have been