(a)whether the ill effects of global recession on our economy are receding
and/ or over;
(b)if so, the facts in this regard;
(c)whether the spell of recession has done enough damage to our financial
sector particularly the banking sector; and
(d)if so, the details thereof and the corrective steps taken and other
precautionary measures being taken up to safeguard our financial sector,
particularly, the banking sector?
MINISTER OF STATE FOR FINANCE(SHRI NAMO NARAIN MEENA)
(a & b): The global financial and economic crisis in 2008-09 led to a slowdown
in the Indian economy with the rate of growth falling from 9.2 per cent in
2007-08 to 6.7 per cent in 2008-09. The year, 2009-10, has shown clear signs of
a recovery with the rate of growth being estimated at 7.2 per cent as per the
Advance Estimates of the Central Statistical Organisation. The other
macroeconomic indicators also point to a recovery.
(c): The balance sheets of Scheduled Commercial Banks (SCBs) in India remained
robust despite the global financial crisis. The leverage ratio (Tier I capital
to total assets ratio) in India has remained high, reflecting the strength of the
banking system. The Capital to Risk-weighted Assets Ratio (CRAR) of SCBs, a
measure of the capacity of banks to absorb unexpected losses, improved to 13.2
per cent at end-March 2009 from 13 per cent at end-March 2008.
(d): In the wake of the global financial crisis, the focus of the policy
initiatives has been to maintain financial stability and to arrest the moderation
in the growth momentum. The initiatives taken in this regard were mainly aimed at
strengthening the banking system and financial markets, while ensuring
uninterrupted flow of credit to different sectors. The prudential regulation and
supervisory policies were also made stronger.