The Hindu Business Line : Despite global crisis, India will sustain growth: PM

The Prime Minister, Dr Manmohan Singh, on Friday said that India was not immune to the ongoing turmoil in international financial markets, but asserted that the country would sustain the growth momentum of 9-9.5 per cent despite the international situation.

“We are living in an increasingly inter-dependent world and the crisis in international markets can have an impact on growth of emerging economies, including India. As of now, I am convinced that we can sustain the growth momentum of 9-9.5 per cent, despite the international situation,” Dr Singh said, at a joint press conference with the visiting French President, Mr Nicolas Sarkozy.

Market turmoil

Dr Singh felt that the Indian economy would not be much affected by the international market turmoil, as the fundamentals of the economy are strong. He expressed hope that the US government would take “appropriate and credible measures” to contain the damage caused by the sub-prime crisis that has threatened the stability of international financial system.

The Prime Minister also noted that the Indian banks are unlikely to face the problem being faced by the French Bank Societe General, where fraud by a single trader caused a loss of €4.9 billion.

Earlier this week, Asian stock markets, including the Indian markets plunged on fears of a recession in the US economy. The Indian stock markets have since rebounded on the back of 75 basis point cut in interest rates by the US Federal Reserve on January 22.

Crisis in France

To a question on the impact of €4.9 billion fraud at Societe Generale, Mr Sarkozy said that the “crisis was radiating out of US sub-prime issue, so there is need for more transparency and less regulation... The situation can’t go like this.”

The French President, however, maintained that the crisis would not impact the French banking system. “We will not be affected. No way, can it affect the stability of the French banking system”.