Breaking silence over the rapidly declining value of rupee, Prime Minister Manmohan Singh today said the development was "certainly a shock" and it will be addressed without reversal of reforms or resorting to capital controls.
Admitting that there are several problems facing the economy and investors are nervous, he said the country will face "short-term shocks" but exuded confidence that growth in the current fiscal will rise to 5.5 per cent, up from a decade's low of 5 per cent in 2012-13.
Speaking in Parliament in the wake of attack over the state of economy, Singh targeted opposition particularly BJP, accusing it of hurting investor sentiments and stalling crucial reforms bills by repeatedly disrupting proceedings.
In Rajya Sabha, Leader of the Opposition Arun Jaitley hit back saying, "we don't want to hear alibis for failure."
Singh said, "the sudden decline in exchange rate is certainly a shock, but we will address this through other measures, not through capital controls or by reversing reforms."
However, at the same time, he said, "to some extent depreciation can be good for the economy as this will help to increase our export competitiveness and discourage imports."
Observing that the country has benefited from open economy in the last two decades, Singh stressed, "There is no question of reversing these policies just because there is some turbulence in capital and currency markets."
In his identical statements in both Lok Sabha and Rajya Sabha, he attributed rupee fall to various global and domestic factors including unsustainably large Current Account Deficit (CAD), US Federal Reserve plans to taper quantitative easing measures and tensions in Syria.
"We are faced with challenges but we have the capacity to deal with them," he said, while seeking support of all political parties in this situation.
In both Houses, BJP members staged a walkout expressing dissatisfaction over Prime Minister's reply. In Lok Sabha, AIADMK, Left and SAD also joined BJP in the walk out.
