(a) whether the economic fundamentals of the country has withstood the
widespread financial crisis effecting various countries of the world;
(b) if so, the details thereof;
(c) if not, the concrete steps proposed to be taken by the Government to
deal with the financial crisis; and
(d) the reaction of the Government on Global Financial Security System and
the steps taken by the Government to bring out India from the said
situation?
MINISTER OF STATE IN THE MINISTRY OF FINANCE
(SHRI NAMO NARAIN MEENA)
(a)to(d) The unfolding of euro zone crisis has impacted the country through
slowdown in FII inflows, fall in the stock markets, slowdown in the Index of
Industrial Production (IIP), decline in the value of the Rupee and a slowdown
in exports in recent months.
The economic fundamentals of the country are however strong which, inter-alia,
include a large domestic demand driven economy, high saving and investment rate
and a robust banking system. Besides, calibrated approach to capital account
convertibility has prevented surge and reversal of debt creating capital flows
to a significant extent. Similarly, the external commercial borrowings policy
that places end-use, all-in-cost and maturity restrictions has been successful
in maintaining external debt at sustainable levels.
The Finance Ministry is keeping a close watch at the situation. The Sub-committee
of the Financial Stability and Development Council (FSDC) headed by the Governor,
Reserve Bank of India is also making continuous assessment in the matter.