Prime Minister Manmohan Singh on Friday promised to help businesses tide over a possible slowdown in the global economy and said the government would take necessary measures to sustain the country’s economic momentum.
Singh also hinted at measures to bring financial comfort to farmers and officials familiar with the development said a debt relief package could come as early as the budget on February 29.
"There are global concerns of a slowdown. We need to be aware of these concerns and we will take steps to limit their impact on us,” he said at the annual meeting of the Federation of Indian Chambers of Commerce and Industry.
The prime minister’s comments lifted the mood in the stock market. On Friday, the Bombay Stock Exchange’s benchmark index Sensex closed 349 points, or 2 per cent, higher.
“The finance and commerce ministers are seized of the matter,” he said, referring to the hardship faced by some sectors of the economy. “I do not see any reason why we cannot sustain 9 per cent growth even in the face of a global slowdown."
"I know that some of you are not happy about our emphasis on inflation control. There have been some impatient editorials about the sacrifice of growth at the altar of inflation control," Singh said. But keeping prices under check was necessary to make economic growth inclusive, Singh said.
Inflation amounts to a discriminatory tax on the poor, he said.
His comments came a day after the government opted for a much awaited hike in prices of petrol and diesel, which is expected to have cascading impact on prices of other goods, especially products of mass consumption.
The wholesale price-based inflation rate is hovering around 4 per cent, which many experts feel is high in today’s context.