The recession dooming in the advanced nations of the world is likely to leave most of its impact on the exports linked sectors of the country, says the Prof. Suresh D. Tendulkar, Chairman of the Economic Advisory Council to the Prime Minister.
The export-linked sectors in the country will be hit harder by the slowdown that has been affecting the entire globe and especially the advanced countries. The Chairman however said that the psychological fear of the global trouble would affect India more than an actual slowdown.
"The prevailing atmosphere of gloom and doom in India is much more in the mind than what seems to be warranted by objective circumstances," he said.
Government as well as Reserve Bank of India has declared a series of measures to support the growth rate of the nation but it is on banks to implement those measures and further pass on the benefit to common man, wherever possible.
Moves taken by the regulators have induced banks to lower interest rate. "There would be transition problems for the bank in moving from high levels of deposit and lending rates to a lower one," he said.
Mr Tendulkar also said that, "It is desirable to reduce repo and reverse repo a rate by 100 basis points, but the call has to be taken by the RBI Governor."
At the same time he stressed that the global downturn would not have a major impact in the Indian markets. "Our growing domestic sector, which remains unaffected by the global meltdown, is our strength," he said.
He also anticipates the inflation rate to come down to around 4% to 6% by the end of the fiscal year. Inflation rate in India which soared to near 13% to 14% has starting showing a downward trend.
Source : Rupee Times