India has outlined plans to curb government foreign trips as part of an austerity drive and says it is “vigorously” committed to curtailing ballooning spending.
The statement late Friday came as India’s currency slumped to a new record low against the dollar with investor risk-aversion amplifying pressure on the rupee, already hit by worries about a slowing domestic economy.
“The government is committed to carry on the process of fiscal consolidation vigorously,” junior finance minister Namo Narain Meena told parliament in a written statement.
Finance Minister Pranab Mukherjee said earlier in the week he would introduce “austerity measures” to “convey a signal we are responding to the situation.”
Along with the travel restrictions, the government also aims to ban purchases of new cars, except by the military, clamp down on holding conferences at five-star hotels and impose “strict discipline” on hiring consultants.
Other measures are expected to be announced later, government officials said.
The finance minister has ascribed many of India’s economic problems to the crisis in the eurozone which has hit exports and prompted foreign investors to pile out of India into the perceived safe haven of US assets.
But the government has also come under attack for its management of the economy with business confidence hit by the sluggish economy, controversial tax rulings, economic reform paralysis and worries over rising welfare subsidies.
India’s growth fell to 6.9% in 2011-2012 from 8.4% the previous year with the unruly coalition government unable to agree on steps to further open up the economy to spur expansion.
Even as the government announced the austerity plans, Civil Aviation Minister Ajit Singh invited journalists to travel with government officials to the United States to take delivery of state-run Air India’s new long-range Boeing jets.
The government’s emailed invitation said “travel, accommodation, etc., will be taken care of by us,” drawing mocking newspaper headlines.
“Austerity be damned: Bleeding Air India flies journalists to lavish US trip,” said the Daily Bhaskar.
Money-losing Air India, known as the “Maharaja of the Skies” for its turbaned cartoon mascot, is in the grips of a crippling pilots’ strike and is an estimated $10 billion in debt.