Big current account deficit hit rupee, growth in second half of fiscal: PM

Asserting that the fall of the rupee is a matter of great concern, Prime Minister Dr. Manmohan Singh on Friday said that the Central Government is taking steps to reduce current account deficit and added that growth will improve in the second half of fiscal year.

"There are concerns and justifiably so on how rupee fall will impact economy, the movement of the rupee recently is a matter of concern to the government," Dr. Singh told the Lok Sabha while making a statement on the current economic situation.

"What triggered the sharp depreciation in Rupee value was due to certain external forces.We need to reduce our appetite for gold, economise the use of petroleum products and take steps to increase our exports," he said.

"The rupee is also getting hit due to high current account deficit. Huge cost of gold and oil imports is also current account deficit. The government is taking steps to reduce current account deficit," he added.

Dr. Singh further said: "To some extent, depreciation can be good for the as this will help to increase our export competitiveness and discourage imports."

Urging political parties to work towards and join in the Government's efforts to put the economy back on the path of stabile growth, Dr. Singh said: "The easy reforms of the past have been done. For more difficult reforms, we need political consensus."

Facing an attack over the economic situation amid a sliding rupee, Dr. Singh told the Parliament on Thursday that he would make a statement on the state of the economy on Friday.

"It cannot be denied that the country is faced with a difficult economic situation. And there are several causes. I do not deny that there are some domestic factors but there are also international factors arising out of the changes in the US monetary stance," Dr. Singh said.

"There are also problems created by the new tensions that are on the horizon in Syria and they have inevitable consequences for oil prices. So we have to reckon with all those uncertainties. I will be very happy to make a statement tomorrow. I need some time to reflect on what I have to say, but I would be quite happy to make the statement tomorrow," he added.

Leader of Opposition in the Rajya Sabha Arun Jaitley on Thursday demanded a statement by the Prime Minister outlining the steps that the Congress-led UPA II Government is contemplating to tackle the present economic situation.