Called a thief, Manmohan loses cool in Rajya Sabha

New Delhi, Aug 30 (Agencies) : Prime Minister Manmohan Singh on Friday aggresively responded to the Opposition's allegations, accusing them of holding up Parliament and delaying reforms.

"Have you heard of any country where MPs shout and walk to the well of the House and say 'Prime Minister chor hai(the PM is a thief)," he said in the Rajya Sabha after BJP leader Arun Jaitley criticised him.
 
"Consensus building is the duty of both the government and the opposition," Singh said. "The opposition has not reconciled to their defeat in 2004."
 
"Have you heard of any parliamentary democracy where the Opposition does not allow the PM to introduce his ministers?"<
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Jaitley responded: "Have you heard of any democracy where the PM buys votes in a trust vote?
 
Earlier, speaking in the Lok Sabha, Singh assured foreign investors his government is not contemplating capital controls as a step to stabilize the falling rupee.
 
Singh says the rupee's sudden decline is a shock, but his government will not address by it imposing capital controls or by reversing reforms.
 
India's stock market has dropped more than 10 percent in the past three months and the rupee has lost a sixth of its value against the dollar this year. Much of that fall has been in the past month.
 
Singh said the rupee's weakness largely stems from India's large current account deficit, caused by huge imports of gold and higher costs of crude oil and coal imports. The government has raised gold taxes and hiked deposit rates to combat the outflow of money.

Rupee slide a concern, but no capital controls: PM

New Delhi, Aug 30 (IANS): Prime Minister Manmohan Singh Friday said while the sharp slide in the value of the rupee caused by external developments was a matter of concern, there was no question of capital controls and India would remain an open economy.

"The depreciation in the value of the rupee since end of May is a matter of concern," the prime minister told the Lok Sabha. "What triggered the sharp depreciation in rupee was the market's reaction to unexpected external developments," he added.

"Clearly, we need to reduce our appetite for gold, economise the use of petroleum products and take steps to increase our exports," he said. At the same time, the fall in rupee's value is good to some extent as it makes exports competitive, he added.

The prime minister also assured that the country's growth which has slipped will pick up soon, and everything would be done to contain the fiscal deficit at 4.8 percent of the gross domestic product (GDP).

The Indian rupee has lost almost 20 percent against the US dollar this fiscal, largely due to pull-out by foreign funds from the Indian markets after the US central bank hinted that it would lower fiscal stimulus as the economy shows sign of recovery.

The rupee fell nearly 4 percent to hit a record low of 68.85 per dollar Wednesday, the biggest single-day percentage loss since October 1995. But the currency recovered and surged 3.5 percent to close at 66.55 against a dollar a day later.
The prime minister, who had made a brief statement on the economic situation Thursday as well, also sought to lift market sentiments Friday with assurances on reforms.

"Last two decades have seen India grow as an open economy and benefited from it. There is no question of reversing these policies," he said. "I would like to assure the house and the world the government is not contemplating any measures on capital controls."

The prime minister said the fundamentals of the Indian economy had continued to remain strong and that both the central bank and the government were taking steps to contain inflation. He said efforts were also underway to contain the current account deficit.

"Growth-friendly way to contain the deficit is to spend carefully, especially on subsidies that do not reach the poor. We will take steps," the prime minister said, while also seeking the support of political parties to pursue good policies.

"The easy reforms of the past have been done. For more difficult reforms, we need political consensus. I urge across political parties to work towards and join in the government's efforts to put the economy back on the path of stable growth."