Indian economy doing well, no oil price cut: PM (Roundup)

November 11th, 2008 - 6:47 pm ICT by IANS  

On Board Air India One, Nov 11 (IANS) India’s economy is on a sound footing, Prime Minister Manmohan Singh has said, vowing to tide over the impact of the global fiscal crisis. But he refused to cut fuel prices because of the huge subsidies the government still provides.Speaking on a variety of subjects on his way home from Oman and Qatar, Manmohan Singh also denied that his Congress-led government was biased against the governments of Kerala, West Bengal and Tripura because they were run by the Communist Party of India-Marxist (CPI-M).

The prime minister used the opportunity to talk in some detail about the significance of his visits to Qatar and Oman, two key members of the Gulf Cooperation Council (GCC).

Referring to the global financial crisis, economist-turned-politician Manmohan Singh said his government would do everything within its power to help the industry tide over any negative impact.

“Ours is a strong economy and there might be a slowdown but it won’t be a major slowdown,” he said.

“We are aware that private companies would have to take steps to safeguard their interests. Whatever industry wants we will take a fresh look at. We will do whatever needed to keep the economy sound.”

The prime minister defended the concessions given to private carriers like allowing them more time to pay their fuel dues to state-run oil retailing firms, saying it was not intended at bailing out their managements.

“There is an employment angle to be looked at. If airlines close down, there will be considerable unemployment. We don’t want unemployment to become more acute, more pronounced.

“It is not a question of helping the rich. It is helping the middle class people - those who will lose their jobs in case the companies were to make losses year after year,” he said.

Prior to his departure, the prime minister had said the resilience of the Indian economy and its market dynamics would help the country return to a high growth path.

But Manmohan Singh declined to cut petrol prices despite their fall globally.

“There are limits to what the government can do on subsidising,” he said.
“When we see that Indian oil companies are able to sustain a reduction, that will be the right (time for such a) decision.”

Opposition parties have demanded a cut in prices of petrol and diesel, arguing that international crude oil prices had fallen from a high of $147 a barrel in July to around $60 a barrel last week.

Manmohan Singh described as “very, very significant” the two defence agreements signed with Qatar.

“They are not just about intelligence sharing but about maritime security as well,” he said.

The two agreements - one on security and law enforcement and another on defence cooperation - were signed Sunday evening after Manmohan Singh’s arrival in Doha on the first visit by an Indian prime minister to Qatar.

The security and law enforcement agreement lays out the framework for sharing of information and database on threats posed by terrorists, money laundering and smuggling of narcotics. The pact on defence cooperation lays out a structure for training programmes by the two sides, exchange of goodwill missions and experts.

On domestic politics, Manmohan Singh refuted allegations that his government was discriminating against the governments of Kerala, Tripura and West Bengal.

“These are states of the Indian union and it is the duty of the central government to go to their help despite the fact that they may be run by parties that are in fact opposed to us,” he said.

Asked if the government was going to go for early general elections, he replied: “I have often said that when the country goes to polls, you will be the first to hear about it.”

Manmohan Singh denied that US president-elect Barack Obama had called other world leaders but not got in touch with the Indian premier.

“This is not true,” he said. “President Obama wanted to talk to me day before yesterday (but) we could not establish the contact because the time that was suggested was too short for me to interact.”

He said he had written “a very warm letter” to Obama and the latter had written “a warm and detailed” letter spelling out his approach to India as well as international affairs.

“I have every reason to believe that India’s relations with the US under President Obama will become stronger than ever before.”

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