As European finance leaders hammered out a 100 billion euro (about Rs 6,90,000 crore) bailout plan for Spain, India’s chief economic advisor, Kaushik Basu, warned that India may face the adverse affects of sputtering European economies.
“It will be very foolish to feel that we are impervious to this or if we bury our head in the sand and say that it is not coming now,” Basu told national broadcaster Doordarshan in a special programme War and Peace.
“If the crisis is there, we will take cover, we have plans of doing that but these waves will be waves that will come up on our shore in a big way,” he said adding protective measures can be taken “as much as possible.”
India has already announced a slew of measures to counter a looming slowdown arising from a demand slump in Europe, its biggest export market.
Basu said it was incorrect to judge the strength of the Indian economy by the value of rupee, which has depreciated by over 12% in the last three months. “It is irrelevant,” Basu said. “The rupee’s strength has got nothing to do with whether it is at 54 or 44 (to a dollar).”
“We do not want huge depreciations but we must get rid of this mindset where we treat the value of the rupee as the strength of the economy,” he said. DD News will air the programme at 3.30 pm on June 13.