SPEECH

September21,2012 NewDelhi PM'saddresstotheNation Mydearbrothersandsisters, Iamspeakingtoyoutonighttoexplainthereasonsforsomeimportanteconomicpolicydecisionsthe governmenthasrecentlytaken.Somepoliticalpartieshaveopposedthem.Youhavearighttoknowthe truthaboutwhywehavetakenthesedecisions. Nogovernmentlikestoimposeburdensonthecommonman.OurGovernmenthasbeenvotedtooffice twicetoprotecttheinterestsoftheaamadmi. Atthesametime,itistheresponsibilityofthegovernmenttodefendthenationalinterest,andprotectthe longtermfutureofourpeople.Thismeansthatwemustensurethattheeconomygrowsrapidly,andthat thisgeneratesenoughproductivejobsfortheyouthofourcountry.Rapidgrowthisalsonecessaryto raisetherevenuesweneedtofinanceourprogrammesineducation,healthcare,housingandrural employment. Thechallengeisthatwehavetodothisatatimewhentheworldeconomyisexperiencinggreatdifficulty. TheUnitedStatesandEuropearestrugglingtodealwithaneconomicslowdownandfinancialcrisis.Even Chinaisslowingdown. Wetoohavebeenaffected,thoughIbelievewehavebeenabletolimittheeffectoftheglobalcrisis. Weareatapointwherewecanreversetheslowdowninourgrowth.Weneedarevivalininvestor confidencedomesticallyandglobally.Thedecisionswehavetakenrecentlyarenecessaryforthis purpose. LetmebeginwiththeriseindieselpricesandthecaponLPGcylinders. Weimportalmost80%ofouroil,andoilpricesintheworldmarkethaveincreasedsharplyinthepastfour years.Wedidnotpassonmostofthispricerisetoyou,sothatwecouldprotectyoufromhardshiptothe maximumextentpossible. Asaresult,thesubsidyonpetroleumproductshasgrownenormously.ItwasRs.1lakh40thousand croreslastyear.Ifwehadnotacted,itwouldhavebeenoverRs.200,000croresthisyear. Wherewouldthemoneyforthishavecomefrom?Moneydoesnotgrowontrees.Ifwehadnotacted,it wouldhavemeantahigherfiscaldeficit,thatis,anunsustainableincreaseingovernmentexpenditurevisa visgovernmentincome.Ifunchecked,thiswouldleadtoafurthersteepriseinpricesandalossof confidenceinoureconomy.Thepricesofessentialcommoditieswouldrisefaster.Bothdomesticaswell asforeigninvestorswouldbereluctanttoinvestinoureconomy.Interestrateswouldrise.Ourcompanies wouldnotbeabletoborrowabroad.Unemploymentwouldincrease. Thelasttimewefacedthisproblemwasin1991.Nobodywaswillingtolendusevensmallamountsof moneythen.Wecameoutofthatcrisisbytakingstrong,resolutesteps.Youcanseethepositiveresults ofthosesteps.Wearenotinthatsituationtoday,butwemustactbeforepeopleloseconfidenceinour economy. Iknowwhathappenedin1991andIwouldbefailinginmydutyasPrimeMinisterofthisgreatcountryifI didnottakestrongpreventiveaction.

Theworldisnotkindtothosewhodonottackletheirownproblems.ManyEuropeancountriesareinthis positiontoday.Theycannotpaytheirbillsandarelookingtoothersforhelp.Theyarehavingtocutwages orpensionstosatisfypotentiallenders. IamdeterminedtoseethatIndiawillnotbepushedintothatsituation.ButIcansucceedonlyifIcan persuadeyoutounderstandwhywehadtoact. WeraisedthepriceofdieselbyjustRs.5perlitreinsteadoftheRs17thatwasneededtocutalllosseson diesel.MuchofdieselisusedbybigcarsandSUVsownedbytherichandbyfactoriesandbusinesses. Shouldgovernmentrunlargefiscaldeficitstosubsidisethem? WereducedtaxesonpetrolbyRs.5perlitretopreventariseinpetrolprices.Wedidthissothatthe croresofmiddleclasspeoplewhodrivescootersandmotorcyclesarenothitfurther. OnLPG,weputacapof6subsidisedcylindersperyear.Almosthalfofourpeople,whoneedourhelpthe most,actuallyuseonly6cylindersorless.Wehaveensuredtheyarenotaffected.Otherswillstillget6 subsidisedcylinders,buttheymustpayahigherpriceformore. Wedidnottouchthepriceofkerosenewhichisconsumedbythepoor. MyDearBrothersandSisters, Youshouldknowthatevenafterthepriceincrease,thepricesofdieselandLPGinIndiaarelowerthan thoseinBangladesh,Nepal,SriLankaandPakistan. ThetotalsubsidyonpetroleumproductswillstillbeRs.160thousandcrores.Thisismorethanwhatwe spendonHealthandEducationtogether.WeheldbackfromraisingpricesfurtherbecauseIhopedthatoil priceswoulddecline. Letmenowturntothedecisiontoallowforeigninvestmentinretailtrade.Somethinkitwillhurtsmall traders.Thisisnottrue. Organised,modernretailingisalreadypresentinourcountryandisgrowing.Allourmajorcitieshavelarge retailchains.Ournationalcapital,Delhi,hasmanynewshoppingcentres.Butithasalsoseenathreefold increaseinsmallshopsinrecentyears. Inagrowingeconomy,thereisenoughspaceforbigandsmalltogrow.Thefearthatsmallretailerswillbe wipedoutiscompletelybaseless. Weshouldalsorememberthattheopeningoforganisedretailtoforeigninvestmentwillbenefitourfarmers. Accordingtotheregulationswehaveintroduced,thosewhobringFDIhavetoinvest50%oftheirmoneyin buildingnewwarehouses,coldstorages,andmoderntransportsystems.Thiswillhelptoensurethata thirdofourfruitsandvegetables,whichatpresentarewastedbecauseofstorageandtransitlosses, actuallyreachtheconsumer.Wastagewillgodownpricespaidtofarmerswillgoupandpricespaidby consumerswillgodown. Thegrowthoforganisedretailwillalsocreatemillionsofgoodqualitynewjobs. Werecognisethatsomepoliticalpartiesareopposedtothisstep.ThatiswhyStategovernmentshave beenallowedtodecidewhetherforeigninvestmentinretailcancomeintotheirstate.Butonestateshould notstopanotherstatefromseekingabetterlifeforitsfarmers,foritsyouthandforitsconsumers. In1991,whenweopenedIndiatoforeigninvestmentinmanufacturing,manywereworried.Buttoday, Indiancompaniesarecompetingeffectivelybothathomeandabroad,andtheyareinvestingaroundthe world.Moreimportantly,foreigncompaniesarecreatingjobsforouryouthinInformationTechnology,in steel,andintheautoindustry.Iamsurethiswillhappeninretailtradeaswell. MyDearBrothersandSisters, TheUPAGovernmentisthegovernmentoftheaamaadmi.

Inthepast8yearsoureconomyhasgrownatarecordannualrateof8.2percent.Wehaveensuredthat povertyhasdeclinedmuchfaster,agriculturehasgrownfaster,andruralconsumptionperpersonhasalso grownfaster. Weneedtodomore,andwewilldomore.Buttoachieveinclusivenessweneedmoregrowth.Andwe mustavoidhighfiscaldeficitswhichcausealossofconfidenceinoureconomy. IpromiseyouthatIwilldoeverythingnecessarytoputourcountrybackonthepathofhighandinclusive growth.ButIneedyoursupport.Pleasedonotbemisledbythosewhowanttoconfuseyoubyspreading fearandfalseinformation.Thesametacticswereadoptedin1991.Theydidnotsucceedthen.Theywillnot succeednow.IhavefullfaithinthewisdomofthepeopleofIndia. Wehavemuchtodotoprotecttheinterestsofournation,andwemustdoitnow.Attimes,weneedtosay "No"totheeasyoptionandsay"Yes"tothemoredifficultone.Thishappenstobeonesuchoccasion.The timehascomeforharddecisions.ForthisIneedyourtrust,yourunderstanding,andyourcooperation. AsPrimeMinisterofthisgreatcountry,Iaskeachoneofyoutostrengthenmyhandssothatwecantake ourcountryforwardandbuildabetterandmoreprosperousfutureforourselvesandforthegenerationsto come. JaiHind. Printedfromthesitehttp://www.pmindia.nic.in