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Steps to boost markets, Rs. on Monday: Pranab

business Updated: Jun 24, 2012 00:49 IST
HT Correspondent
HT Correspondent
Hindustan Times
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Three days after Prime Minister Manmohan Singh promised reformist actions at the G-20 meeting in Mexico, finance minister Pranab Mukherjee said in Kolkata on Saturday that steps were likely to be announced on Monday.

He said the steps would aim at stemming the rupee's slide and boost market sentiments.

"We will be able to take certain measures, which will improve the market conditions."

Mukherjee, who quits as finance minister on Tuesday to contest the presidential poll, made this announcement amid apprehension that the economy would further slowdown if immediate measures weren't initiated.

He said economic affairs secretary R Gopalan had discussed the remedial measures with RBI governor D Subbarao on Friday.

A sliding rupee, which hit a record low of 57.32 against the dollar on Friday, resulted in steep rise in prices of most import goods - including crude oil.

The inflation rate based on wholesale prices galloped towards a worrisome 7.55% in May from 7.23% in April.

India's gross domestic product growth - hammered by a widespread industrial slowdown - slumped to a nine-year low of 5.3% in January-March 2012 and 6.5% in 2011-12.

Industrial output grew just 0.1% in April, adding to the anguish of the government's economic managers.

Global investors and credit rating agencies, including Standard and Poor's, Fitch and Moody's, have not spared the government while criticising its management of the economy.

What's more, recent policy pronouncements, such as the budget provision to empower taxmen to scrutinise older corporate deals, have sparked fears among global and domestic investors.

Mukherjee said, "There is inflationary pressure on economy and there is depreciation of the rupee. These are, no doubt, signs of weakness in Indian economy ... I am concerned but not depressed."

He said when the global economy is in turmoil, "no country can expect that there will be pockets of development and particularly a large economy like India, which is the third largest in terms of purchasing power parity, cannot remain insulated from external factors."