PM: fiscal & monetary measures have helped India weather the storm better

PM: fiscal & monetary measures have helped India weather the storm better
The Financial Express, April 14, 2009, Page 1

Economy Bureau, Mumbai

Prime Minister Manmohan Singh on Monday admitted that the slowdown is a matter of concern, but asserted that India has weathered the storm much better than most. He noted that this was possible both due to monetary and fiscal policies to stimulate the economy.

Speaking in Mumbai on Monday, Singh also took a dig at the BJP-led NDA, saying when it was in power, GDP growth was around 5.8%, whereas during the Congress-led UPA government it had touched 9%. Despite the global economic meltdown, growth in 2008-09 would be a little less than 7%.

“Last year, our growth was interrupted by a truly exceptional global downturn. We, too, have been affected. But we have weathered the storm much better than most. Our situation is very different from the deep recession being experienced elsewhere,” he noted. The PM was speaking at an exclusive gathering that included captains of industry, organised by the Mumbai Pradesh Congress Committee.

In a similar vein, former RBI governor and current advisor to the PM C Rangarajan voiced similar optimism at the 43 rd convocation of the Indian Institute of Foreign Trade in New Delhi. “We will (see) signs of recovery in the second half of 2009. Fiscal 2010-11 will see an improvement in growth,” he said. Noting that the initiatives by RBI to ease liquidity have not percolated down to ground level, Rangarajan said it was necessary for the central bank to watch the liquidity situation and take steps from time to time.

On the issue of tackling black money, the Prime Minister said the UPA government had taken a slew of steps to unearth unaccounted money in overseas accounts held by Indian nationals. “There have been some instances recently where these things came to our notice with regard to Germany, with regard to Switzerland. I think contact is being established with the relevant authorities to provide necessary information.”

He further said there would be flow of information between the tax authorities and the banking sector once the G-20 Summit decisions to regulate tax havens are implemented. Singh also dismissed claims by BJP prime ministerial candidate LK Advani regarding estimates of black money by describing them as a figment of imagination. The BJP in its election manifesto said unaccounted money in overseas banks amount to Rs 25-75 lakh crore--large enough to allocate Rs 4 crore for development of each village in the country.

On Tech Mahindra winning the bid for fraud-hit Satyam Computer, Singh expressed reluctance to comment as the concerned board was authorised to take the necessary decisions. However, replying to another question, the PM said the country’s regulatory structure is strong enough to prevent a Satyam-like fraud in future. “Even when companies across the globe had (gone) bust due to the meltdown, Indian companies were in recognition and they continue to receive orders,” he noted.