Press Information Bureau

Government of India

Ministry of Finance

08-August-2011 17:38 IST

The Union Finance Minister Shri Pranab Mukherjee said that the recent developments in the US and Eurozone have injected certain uncertainty in global markets. The Finance Minister said that these developments could have some impact on our economy as well. But Shri Mukherjee assured that India’s growth story is intact and its fundamentals are strong. The Finance Minister Shri Mukherjee said that we are in a better position than many other nations to manage this challenge.

The Union Finance Minister Shri Pranab Mukherjee said that there could be some impact on the capital and trade flows in the country. The Finance Minister reiterated since our economy is having strong fundamentals, therefore, we could notice FIIs seeing India as an attractive investment destination even if there is any temporary outflow. Shri Mukherjee said that in addition, we could rather see faster and greater FII inflows, unlike after 2008, in view of the higher returns that global investors could get in India. He said that our institutions are strong and are prepared to address any concern that may arise on account of the present situation.

The Union Finance Minister Shri Pranab Mukherjee said that softening of the international commodity prices, especially fuel oil will help check inflationary pressures in the economy. The Finance Minister said that it will also help in maintaining the fiscal balance for the year 2011-12.

The Finance Minister Shri Mukherjee said meanwhile the government will fast track the implementation of pending reforms and keep a close eye on international developments. Shri Mukherjee said that we would also focus on encouraging greater domestic consumption and give impetus to the drivers of domestic growth.

DSM/GN/PM

Fast track reforms to bolster domestic growth and fiscal stability while managing external capital flow risks. India's macroeconomic fundamentals and institutional resilience are deemed sufficient to manage external volatility, with potential for sustained or increased foreign institutional investment. Easing international commodity prices, notably oil, are expected to ease inflationary pressure and support the fiscal balance. The government will fast track implementation of pending reforms, closely monitor international developments, and focus on encouraging greater domestic consumption and strengthening drivers of domestic growth to mitigate external risks.