Terming the current global financial crisis as “unprecedented,” Prime Minister Manmohan Singh on Monday hinted at a possible fiscal stimulus to revive growth by boosting infrastructure projects, as he announced a high-powered panel to find ways to minimise the meltdown’s impact on the country.
Finance Minister P. Chidambaram will head the committee that would include Commerce Minister Kamal Nath and the Planning Commission’s deputy chairman, Montek Singh Ahluwalia.
The Prime Minister identified job losses, real estate and infrastructure among core areas seeking corrective action.
“Expanding investment in infrastructure can play an important counter-cyclical role in this situation,” he said. “A crisis
of this magnitude was bound to affect our economy and it has. International credit has shrunk with adverse effects on our corporates and our banks,” Singh told worried captains of industry at a special meeting.
“The government is closely monitoring the evolving macro-economic situation and is fully alive to its responsibility to sustain the growth momentum of the economy at a reasonable level,” the prime minister said.
The government has invited suggestions from industrialists. “Policies would be formulated to address genuine concerns,” Commerce Secretary G.K.Pillai said. Infrastructure development, including public and private partnership projects, will be reviewed to ensure they are not affected by funds constraints, the prime minister said.
“We have got an assurance that the government and the industry are on one side and the government will work with the
industry to see that any challenge is alleviated,” said the Confederation of Indian Industry's President and CEO of ICICI Bank, K.V.Kamath.
Ficci President Rajeev Chandrasekhar said that re-igniting the growth process and increasing the level of investor confidence was important to address the current crisis.