In the wake of the slowdown in the economy, monetary measures should have been more aggressive in addressing concerns arising out of the global credit crisis, Arvind Virmani, chief economic adviser said on Wednesday.
Speaking at a function organised by the PHD Chamber of Commerce and Industry, Virmani pointed out that “unfreezing of the market” would be key in restoring the growth momentum. The move would also impact capital flows, he added.
Foreign direct investment has shown a significant increase in the first six months of the current fiscal, Virmani said. Underlining that India’s average growth rate in the last five years has been 8.9 per cent, he said that the fiscal policy response will help India overcome part of the problems which have arisen due to the global financial crisis.
“We do not have any policy to address to what is happening in US or any other economy, which are reeling under financial meltdown,” he added.
“Some analysts pointed out the crisis would bottom out by the end of the year and they revised their prediction to July 2009. The pertinent point is that it is a global problem and its solutions are very closely linked to global economic developments,” Virmani said.