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India could become global 'safe haven', says Basu

business Updated: Aug 09, 2011 00:59 IST
HT Correspondent
HT Correspondent
Hindustan Times
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Amid the current crisis, India could turn out to be a safe haven for global investors in the next few months, the government said on Monday.

“In the next months and in the medium-to-long run, there will be global capital in search of safe haven, we can become the safe haven that a lot of global capital will be seeking,” said Kaushik Basu, chief economic adviser.

The thrust of the global economy could shift towards the eastern part of the globe including India and China, he added.

Also since prices of global commodities, mainly crude oil, have started coming down, the pressure on inflation would ease, he said. "It (falling global crude prices) will have a dampening effect on inflation because we have been worried about international commodity prices."

The slump in the stock market on Monday was mainly a panic reaction and there was no need for any immediate policy intervention, Basu said. “Right now, we don't need any special measures, should the need arise, the government and the central bank are in a position to step in.”