Despite global crisis Indian economy strong: FM

PTI

New Delhi, 07 August 2011: Finance Minister Pranab Mukherjee on Saturday asserted that India’s growth story is intact and the country would achieve appreciable economic expansion despite negative sentiments across the world.

"Our growth story is intact and fundamentals are strong. Our markets have the capacity to withstand the negative sentiments affecting the external world," Mukherjee said while addressing the industry captains at a function organised by the Confederation of Indian Industry (CII).

 

However the FM said that downgrading of US sovereign rating will have some implications on India, but there is no need to press panic button as fundamentals of the economy are strong.

 

"There is a crisis, but I am not unnecessarily worried. There is no point of pressing the panic button," he said a day after global stock markets, including India’s crashed, wiping billions of dollars out of investors’ wealth.

 

The downgrade, Mukherjee said, will further aggravate the global economy which still is reeling under the after effects of 2008 meltdown.

 

Mukherjee’s comments come in the wake of Standard & Poor’s downgrading the sovereign rating of the US government from ’AAA’ to ’AA+’, a development which raises concerns that investors will lose confidence in the American economy.

 

Commenting on the sharp fall and partial recovery in stock markets yesterday, the Finance Minister said, "These sentiments in the developed nations affected our markets on last Friday. But we witnessed some recovery already and this is testimony to our capacity for resilience."
 

The Bombay Stock Exchange benchmark Sensex yesterday had plunged over 700 points but recovered some of the lost ground to settle at day at 17,305.87, down 387.31 points.

 

India has taken several measures to make its markets attractive, robust and vibrant and would continue to do making it an attractive investment destination for foreign capital, the Finance Minister said.

 

Mukherjee, however, expressed concern over high inflation and said, "Our major challenge in the short-term is inflation, which has implications of sustaining our growth momentum."