Govt firm to protect country's economic growth: PM

To protect the country from the wave of unprecedented global economic crisis, which has hurt the entire world including India, Prime Minister Manmohan Singh on Monday (Nov 3) convened a meeting with the presidents of apex chambers and leading industrialists at his South Block office, and asked the corporates to come ahead and tackle the abnormal situation with the government.

Addressing the present leading business persons and heads of top financial institutes Dr. Singh said that it was the top priority of United Progressive Alliance (UPA) government to protect the Indian financial system from a possible loss of confidence or contagion effects. Appealing to the corporates, he said, “Industry must bear in mind its societal obligations in coping with the effects of this global crisis.”

“We're meeting at a time when the world economy is going through unprecedented crisis, which started in the financial sector in the US, but has now spread globally," addressed PM by adding that India has recognised the abnormal situation and country needs to be alert constantly.

Stressing the government’s effort to combat this unexpected and huge global economic crunch, PM said that government was closely monitoring the current economic situation day by day and some steps had been taken to blunt the edge of recession, while his government would not hesitate to take some strict but necessary measures, if required to sustain the economic growth rate of India in the range of 7 to 8 percent. However, he accepted that in the current global economic scenario, India’s projected economic growth rate of over 9 percent can not be achieved.

Manmohan also appealed to the entrepreneurs not to cut the jobs in their industry viewing the long running global economic depression, as many companies including some major firms were cutting the hefty jobs and thousands of people were losing their bread and butter. Instead, he urged the industry to have patience and work towards creating new job opportunities.

In the context of banking system, PM said that India’s banking system is still strong and there are no far and wide chances to face the liquidity crisis. The Reserve Bank of India (RBI) was taking necessary measures to tackle the inflation and liquidity problem. “I am happy to say that the direct exposure of our banks to problem assets is minimal. Our banks are well regulated and also well capitalised. Both public and the private sector banks are safe, and the government stands behind it and that no one should fear for the safety of bank deposits," said PM.

Citing the present declining path of inflation, Dr. Singh said that it is at least a sign of relief considering the progress in the last few weeks, which would eventually be brought to a comfort level. He also said that government would set up a high powered committee to ensure the industries to avoid any sort of liquidity crunch and high interest rate problems.

Rajeev Chandrasekhar, president of the Federation of Indian Chambers of Commerce and Industry (FICCI); K.V. Kamath, head of the Confederation of Indian Industry (CII); Sajjan Jindal of the Associated Chambers of Commerce and Industry of India (Assocham); Union Finance Minister P Chidambaram; Commerce and Industry Minister Kamal Nath, and Deputy Chairman of Planning Commission Montek Singh were present in the meeting.

Among industry leaders, Mukesh Ambani, the Chairman of Reliance Industries; Anil Ambani, Chairman of Reliance Anil Dhirubhai Ambani Group; Sunil Mittal, Chairman of Bharti Group; K P Singh, Chairman of DLF, and Nandan Nilekani, Co-Chairman of Infosys also attended the meeting on Monday.