New Delhi, Aug 5 (IANS) Finance Minister Pranab Mukherjee Thursday invoked memories of India mortgaging its gold in banks abroad to wriggle out of a balance of payment crisis in the 1990s while defending the hike in fuel prices.
During a debate in the Rajya Sabha on rising inflation, he said the country could not go on doling out populist measures and endangering its finances.
In 1991, the then government had to pawn 47 tonnes of gold to the Bank of England and another 20 tonnes to the Union Bank of Switzerland to raise $600 million.
‘I cannot forget the days of 1990, when the country’s gold was pledged with a foreign bank, just to borrow a few hundred million dollars, when the finance minister of this great country had to go and meet the finance minister of a rich country, but had to wait for some time to get an appointment,’ said Mukherjee.
‘I don’t want any finance minister of this country to face that type of humiliating situation again whether I am there or not there.’
Mukherjee defended the fuel price hike and reiterated his government’s efforts to curb high inflation.
The minister said states and the federal government needed to act collectively to tackle high food prices and his government alone could not be blamed if the states had not got their act together.
‘The basic question is, can a country afford to have 6.6 percent fiscal deficit. Shouldn’t we come back to a deficit of 2-2.5 percent,’ he asked.