Prime Minister outlines the measures being taken to face the global financial crisis


November 03, 2008:

Some duty cuts have been announced to provide relief to civil aviation sector and the iron & steel industry.

Overall, the Government is closely monitoring the evolving macro economic situation and is fully alive to its responsibilities to sustain the growth momentum of the economy at a reasonable level. Expanding investment in infrastructure can play an important counter cyclical role in this situation. We will review projects and programmes in the area of infrastructure development, including both pure public sector projects and public private partnership projects, to ensure that their implementation is expedited and they do not suffer from constraints of funds. We are in any case expanding expenditure in the social sectors i. e. health and education and in rural and agricultural development and progress in these areas will be closely monitored. I am happy to state that our efforts in reviving the momentum in agriculture have clearly bore fruit and we have seen a growth rate of around 4.7% in the past three years and this is expected to continue in the current year. Taken together, these efforts will help to maintain the pace of both growth and stability in the economy.

I invite all of you, to join in the effort to convert this global crisis into an opportunity for India. I trust you will continue to show the confidence and dynamism that had taken our manufacturing growth to all time highs and the rate of growth of the economy to a level that was considered unimaginable, even a decade ago. Our high savings and investment rates have been a great strength in the recent past and we hope that the Indian corporate sector will not let the global crisis shake its confidence. While every effort needs to be made to cut costs and raise productivity, I hope there will be no knee jerk reaction such as large scale lay-offs which may lead to a negative spiral. Industry must bear in mind its societal obligations in coping with the effects of this global crisis. Government and industry must act in a true spirit of partnership to meet the challenges that lie ahead.

I would like to assure each one of you that the Government will take all necessary monetary and fiscal policy measures on the domestic front to protect our growth rates. On the international front, we are working closely with other countries to ensure coordinated policy action and increased development cooperation for the containment of this crisis. We will seek reform of the international financial institutions, and improved regulation and supervision, to prevent recurrence of such crises.

I welcome you comments and suggestions regarding the strategy we should adopt, both in our international negotiations and in the domestic arena.

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