ID :
23957
Sat, 10/11/2008 - 17:25
Auther :
Shortlink :
http://m.oananews.org//node/23957
The shortlink copeid
India can weather financial storm: F.M.
New Delhi, Oct 10 (PTI) Finance Minister P.
Chidambaram Saturday expressed confidence that India can
weather the storm of financial crisis blowing across the world
saying the country's economic fundamentals and the banking
system were strong.
He admitted there is a liquidity crunch in the market
and that the economy was facing 'spill over and ripple'
effects of the global storm but held out an assurance that the
"Reserve Bank of India (R.B.I.) is ready to take further steps
and infuse more liquidity if necessary".
Referring to the current global meltdown, Chidambaram
said "there is a storm blowing in the world. We did not not
create the storm. We are facing the spillover effects or the
ripple effects of the storm.
"We must brace ourself and weather the storm. I am
confident that the Indian economy is strong and resilient to
weather the storm and I would request all players in the
economy to cooperate with the government in weathering the
storm," he told P.T.I.
Chidambaram said "the weekend is a good time for
people to reflect. Firstly, those who have money... there have
been wage increases for the government servants, and many have
received Diwali bonuses.
"Those who have money should spend some money and
should save some money. Savings in banks are completely safe.
Our banks are well regulated and well capitalised. Depending
on your risk threshold you can save in some other instruments.
Someone with a low risk threshold should save in a bank," he
said.
The Finance Minister said for those who need money for
running their businesses, trade and firms, the government
recognised that there is a liquidity crunch.
"But we have responded swiftly and we have infused a
huge amount of liquidity. Between now and October 25 or so, a
huge amount of liquidity will find its way into the Market
through Cash Reserve Ratio (C.R.R.) cut, fertiliser subsidy,
additional spending on National Rural Employment Guarantee
schemes and payment to banks for loan waiver," he said.
Besides, the R.B.I. is ready to take further steps to
infuse more liquidity, if necessary, he added.
On deposits in banks, Chidambaram said "no depositor
need have any reason to worry. Different investors have
different risk profiles. But if you are an investor you should
take informed decisions. The last thing you should do is to
act in haste. The last thing you should do is to give room for
panic."
He maintained that the fundamentals of the real
economy were strong. "If you ask me whether the fundamentals
of the economy have changed so dramatically as portrayed in
the stock market, the answer is no."
In fact, Chidambaram said that some promoters were
buying shares this time. Therefore, no investor need to take
any decision in haste or in panic. "He or she should take
informed decisions."
Chidambaram said "The weekend is a good time to
calmly reflect on the situation. Any citizen of India should
reflect calmly while coming to the conclusion that we can
weather the storm."
The minister said inflation was inching down and huge
capacities were being added. "Our regulators are vigilant and
any citizen of India should reflect calmly on the way we
should weather the storm."
To a query, he said the export and import growth was
35.1 and 37.5 per cent respectively in dollar terms.
He doubted the industrial production figures, which
showed a plummeting of industrial growth to 1.3 per cent, and
said he has conveyed his concerns to the Ministry of Industry.
"There are certain concerns about the I.I.P. figures
and I have conveyed these concerns in the past and today to
the Ministry of Industry," he said reacting to the data on
Index of Industrial Production figures released Friday.
Chidambaram said "growth in capital goods in July
was 20 percent. This has fallen to 2.3 percent in August.
There cannot be such a dramatic shift in capital goods
production. It can't take place."
"Therefore I have asked them to do a double check on
these numbers. In July the figures were revised from 7.1
percent to 7.4 percent," he said adding that if these are the
numbers then the performance of August is not very
satisfactory.
Chidambaram Saturday expressed confidence that India can
weather the storm of financial crisis blowing across the world
saying the country's economic fundamentals and the banking
system were strong.
He admitted there is a liquidity crunch in the market
and that the economy was facing 'spill over and ripple'
effects of the global storm but held out an assurance that the
"Reserve Bank of India (R.B.I.) is ready to take further steps
and infuse more liquidity if necessary".
Referring to the current global meltdown, Chidambaram
said "there is a storm blowing in the world. We did not not
create the storm. We are facing the spillover effects or the
ripple effects of the storm.
"We must brace ourself and weather the storm. I am
confident that the Indian economy is strong and resilient to
weather the storm and I would request all players in the
economy to cooperate with the government in weathering the
storm," he told P.T.I.
Chidambaram said "the weekend is a good time for
people to reflect. Firstly, those who have money... there have
been wage increases for the government servants, and many have
received Diwali bonuses.
"Those who have money should spend some money and
should save some money. Savings in banks are completely safe.
Our banks are well regulated and well capitalised. Depending
on your risk threshold you can save in some other instruments.
Someone with a low risk threshold should save in a bank," he
said.
The Finance Minister said for those who need money for
running their businesses, trade and firms, the government
recognised that there is a liquidity crunch.
"But we have responded swiftly and we have infused a
huge amount of liquidity. Between now and October 25 or so, a
huge amount of liquidity will find its way into the Market
through Cash Reserve Ratio (C.R.R.) cut, fertiliser subsidy,
additional spending on National Rural Employment Guarantee
schemes and payment to banks for loan waiver," he said.
Besides, the R.B.I. is ready to take further steps to
infuse more liquidity, if necessary, he added.
On deposits in banks, Chidambaram said "no depositor
need have any reason to worry. Different investors have
different risk profiles. But if you are an investor you should
take informed decisions. The last thing you should do is to
act in haste. The last thing you should do is to give room for
panic."
He maintained that the fundamentals of the real
economy were strong. "If you ask me whether the fundamentals
of the economy have changed so dramatically as portrayed in
the stock market, the answer is no."
In fact, Chidambaram said that some promoters were
buying shares this time. Therefore, no investor need to take
any decision in haste or in panic. "He or she should take
informed decisions."
Chidambaram said "The weekend is a good time to
calmly reflect on the situation. Any citizen of India should
reflect calmly while coming to the conclusion that we can
weather the storm."
The minister said inflation was inching down and huge
capacities were being added. "Our regulators are vigilant and
any citizen of India should reflect calmly on the way we
should weather the storm."
To a query, he said the export and import growth was
35.1 and 37.5 per cent respectively in dollar terms.
He doubted the industrial production figures, which
showed a plummeting of industrial growth to 1.3 per cent, and
said he has conveyed his concerns to the Ministry of Industry.
"There are certain concerns about the I.I.P. figures
and I have conveyed these concerns in the past and today to
the Ministry of Industry," he said reacting to the data on
Index of Industrial Production figures released Friday.
Chidambaram said "growth in capital goods in July
was 20 percent. This has fallen to 2.3 percent in August.
There cannot be such a dramatic shift in capital goods
production. It can't take place."
"Therefore I have asked them to do a double check on
these numbers. In July the figures were revised from 7.1
percent to 7.4 percent," he said adding that if these are the
numbers then the performance of August is not very
satisfactory.
