Pranab Mukherjee defends India's growth story in Rajya Sabha

New Delhi: Worry over the Rupee's record slide found echo in Parliament today, with the Opposition asking the government what steps it was taking to ensure that there was no repeat of 1991, when India saw a severe balance of payments problem and even had to mortgage gold. In his reply to the debate on the finance bill in the Rajya Sabha, Finance Minister Pranab Mukherjee talked about the Rupee decline as he attempted to allay fears about the state of the Indian economy.

The Rupee took a severe beating today to touch a record low of 54.46 against the Dollar after a spurt in capital outflow and as markets across the globe tanked over the Eurozone crisis.

The "Indian growth story is intact," the Finance Minister said, adding, that while he is disappointed with the 6.9 per cent growth in 2011-12, he expects the growth to be around 7 per cent in 2012-13.

Here are highlights of his response in Rajya Sabha:

• Fall in markets due to Greek crisis. It is a complex situation in Europe, we cannot ignore it.
  
  
• The rupee fall arising out of the weakness in Euro.  There are concerns over whether the packaged devised by European Central Bank with IMF support will be enough. The entire Asian market is affected.
  
  
• In 2008, we had to announce fiscal stimulus package worth Rs 1,86,000 crore, a little more than 3 per cent of GDP at that time. When looking at chart of GDP in Q1, and way it was going since October no one knew where it would stop. We were able to stop deceleration of growth and made it up in next two years.
  
  
• Indian growth story is intact. Today we are disappointed, 'why 6.9 per cent GDP growth', because we have seen the success of the growth story for quite some time. India's growth story has not come to an end. I have confidence in people and political system of this country. 
  
  
•  "The buck stops at me, I agree. Buck stops at our door. I'm not passing on the buck. I'm owning the responsibility. But I cannot be Don Quixote. I cannot live in a world which is not reality. I cannot consider a windmill in the form of an imprisoned and bonded princess and try to rescue her. I shall have to keep in mind that this is a difficult world.
  
  
• I cannot take decisions (on fuel subsidy) alone unless I have all the states on board. We are trying to convince state governments to reduce state duties on oil.
  
  
• I don't want to press panic button, but austerity is needed. I am going to put in some austerity measures. It is important to send a signal. We will need to focus on implementation on projects.
  
  
• I will bite the bullet on subsidy when I know it will not end in a fiasco. They are around two per cent of the GDP.

 
The BJP brought up Rupee decline in the Lok Sabha, with senior BJP leader and former Finance Minister Murli Manohar Joshi asking during Zero Hour, "The crisis in our economy is growing. Are we heading towards 1991?"  Mr Joshi wondered whether the economic meltdown of US followed by that of Europe was now taking India in its grip and sought to know what steps the government was taking to tackle the serious situation. He said the decreasing value of the rupee meant the devaluation of the work of Indian labour. Mr Joshi sought a discussion on the issue, and said he had doubts about government's claims that fundamentals of the economy were strong.