Comments
Seeking to calm the upheaval in the markets caused by the downgrade of the US economy, the government on Tuesday said there was no need to press the panic button and the stage for an intervention has not been reached yet.
“These are too early days... only one downgrading should not lead to pressing of the panic button. We are carefully monitoring the developments and the stage has not come for us to become anxious or to make interventions,” Commerce and Industry Minister Mr Anand Sharma told reporters here.
Ratings agency S&P this weekend downgraded the long-term sovereign rating of the US from the top-notch ‘AAA’ level for the first time in history.
Indian industry and particularly exporters have expressed concern that the economic situation in the US may impact the country’s exports adversely.
Mr Sharma said that India’s exports may not witness high growth rates in the short term, but are expected to grow by about 25 per cent in 2011-12.
“There is no reason that why we will not grow. Even if there is a slight moderation (in exports), we will definitely meet our (exports) target (of $500 billion by 2014),” he said on the sidelines of an Assocham function here.
He said that developments in the major Western economies would have an impact on other regions of the world.
“It is true that the global economic recovery has not been robust, it has been uneven, but at the same time, its impact on India is very limited,” he said.
Commerce Secretary Mr Rahul Khullar yesterday said that India’s exports growth will start coming down from August-September because of the fundamental issues with the US and Europe.
During April-June this fiscal, India’s exports grew by 45.7 per cent year-on-year to $79 billion.
On the RBI’s move to increase interest rates, Mr Sharma said the central bank has assured that the industry and exporters will get easy and affordable credit.
“The RBI has assured... We have also demanded that the cost of credit to be manageable so that we remain globally competitive and the industry is assured of liquidity as well as the dollar credit,” he added.
The central bank has raised key interest rates 11 times since March, 2010.
Further, he said: “The volatility of the last few days (due to the downgrading) is a temporary turbulence and the market should stabilise.”
Comments
COMMENT NOW
Comments
Comments have to be in English, and in full sentences. They cannot be abusive or personal. Please abide by our community guidelines for posting your comments.
We have migrated to a new commenting platform. If you are already a registered user of TheHindu Businessline and logged in, you may continue to engage with our articles. If you do not have an account please register and login to post comments. Users can access their older comments by logging into their accounts on Vuukle.