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India's economy moving in positive direction: Pranab

With all eyes on the global situation, finance minister Pranab Mukherjee on Wednesday said India's macro-economy was moving in a positive direction and hoped international commodity prices would decline, helping the government tame inflation and cut subsidies.

business Updated: Aug 10, 2011 14:13 IST
PTI

With all eyes on the global situation, finance minister Pranab Mukherjee on Wednesday said India's macro-economy was moving in a positive direction and hoped international commodity prices would decline, helping the government tame inflation and cut subsidies.

Mukherjee maintained that India's economic fundamentals were strong and capable of meeting any challenge posed by the downgrade of the US economy and the crisis in some eurozone nations.

"I would like to emphasis that some of the investment banks have upgraded India to market weight, that means the basic fundamentals are strong and macroeconomy recovery is moving toward a positive direction," he told reporters, referring to Tuesday's Goldman Sachs report.

The minister said the US downgrade has created some problems for India, but the country could handle any situation arising out of international developments.

"The challenge is there, but we have the capabilities of facing these challenges," Mukherjee said. "... Collectively, with the efforts of all concerned, particularly with the cooperation of the RBI, we will be able to face the challenges," he added.

Expressing happiness over the quick recovery shown by the Indian stock market, which was much better than other Asian countries, he said, however, it was too early to say how the markets would behave in future.

The downgrade of the US economy by Standard and Poor's last week has created havoc in stock markets worldwide, but led to a decline in commodity prices, including crude oil.

Talking about the decline in crude prices, Mukherjee said he was not fully satisfied with the downward movement from $107 per barrel to $102 per barrel, as it is still "reasonably high".

First Published: Aug 10, 2011 14:10 IST