Tough decisions on spending, revenue on anvil: Prime Minister

"Difficult decisions have to be taken on both spending and revenue mobilisation", he said while speaking at function to mark the completion of third year of the UPA-II government.

His statement comes in the backdrop of announcement made by Finance Minister Pranab Mukherjee recently in the Rajya Sabha that government would roll out austerity measures.

When asked by reporters about details of tough measures being contemplated by the government, Singh said, "let us wait. Sometimes, something will be obvious".

The Prime Minister during his address specifically flagged the issue of worsening balance of payment and fiscal situation.

"I recognise that we face pressures on our balance of payments and that the fiscal situation needs careful management. Determined measures are needed to boost the climate for industrial investment, both domestic and foreign", he added.

While the current account deficit (CAD), which indicates the difference between inflow and outflow of foreign exchange, is expected to rise to 4 per cent of the GDP in 2011-12 from 3.3 per cent a year ago, the high crude oil prices will put pressure on government finances.

More importantly, steep fall in value of rupee, which crossed Rs 55 to a dollar, will push up the cost of imports, especially the petroleum products and imported fertiliser. The Oil Marketing Companies (OMCs) have been clamouring for increase in retail prices of petroleum products.

When asked about declining value of rupee, Singh quipped, "in a market economy, currency goes up and down". (MORE)