Mumbai: The worst is over for the Indian economy and measures to control the sharp rise in food prices are taking effect, Prime Minister Manmohan Singh said on Sunday.
Singh, in Mumbai to campaign for the ruling Congress party ahead of state polls, said he was confident the harvest would be normal, despite the weakest monsoon since 1972.
Straight talk:Prime Minister Manmohan Singh in Mumbai on Sunday. AP
“The worst is indeed over,” he said. “The price rise has been due to the drought. Steps are being taken. I am confident the harvest will be normal.”
Singh had said earlier the Indian economy is likely to grow at 6.3-6.5% in the fiscal year to March 2010, or a seven-year low. Economic stimulus measures were likely to continue as Asia’s third-largest economy was not operating at full capacity, Singh has said.
On the issue of chief executives’ salaries, Singh ruled out any government curbs, saying it was best left to the boards of companies. The debate was triggered by corporate affairs minister Salman Khursheed when he recently said, “When we are working on this (austerity), we can hardly say that we (will) shut our eyes on what salary the CEOs are going to take.”
On the Naxal violence, Singh said the government will rely on police and the paramilitary rather than the Armed Forces to counter the rebels. “Evil designs of these groups are well known and we will take effective measures to counter that,” he said. “If they shed the path of violence we are willing to talk... We need to look at the causes of alienation, particularly those of tribals.”
India banned the Communist rebels and at least a dozen front organizations on 22 June, granting police greater arrest powers. At least 720 civilians and security personnel died in attacks by the rebels in 2008, and 455 people in the first six months of this year, according to the government.
Singh also admitted to leaks in funds marked for development works, but said it was “not as big as was mentioned by Rajiv Gandhi”. The former prime minister had in 1985 said, “Of every rupee spent by the government, only 17 paise reached the intended beneficiary”.
(‘Bloomberg’ and ‘PTI’ contributed to this story.)