Amid rising concerns over the mounting economic crisis in the US and European countries, finance minister Pranab Mukherjee on Monday said that India’s fundamentals were strong and its growth story would remain intact.
“We would focus on encouraging greater domestic consumption and give impetus to the drivers of domestic growth,” said Mukherjee. The country was better prepared to address the situation and pending reforms could be put on fast- track, he added.
“As India’s growth story is intact and its fundamentals strong, we are in a better position than many other nations to manage the challenge,” Mukherjee said, admitting that the recent developments in the US and the eurozone have injected uncertainty and could have “some impact” on the domestic market.There could be faster and greater inflows by foreign institutional investors into the country, as global investors could look for higher returns from India, he said.
The finance minister also said that India’s institutions were strong and the country was prepared to address any concern that may arise on account of the present situation. “The government will also fast-track the implementation of pending reforms and keep a close eye on international developments.”
Easing of international commodity prices including fuel oil, would help in controlling inflationary pressures while maintaining the fiscal balance for the current fiscal year, he said.
Mukherjee’s remarks appeared to have a sobering effect on the markets at least, with the benchmark Sensex ending the day with a loss of 315.7 points, or 1.8%, after falling nearly 550 points, or 3.2%, at one stage intra-day.