The Indian economy is not in recession. There has been a moderation in the growth of the domestic economy due to the impact of the global meltdown. The Government and the Reserve Bank of India have taken various contra cyclical measures to safeguard the economy against adverse impact of the global financial crisis. These measures since mid September, inter-alia include reduction in Cash Reserve Ratio and Statutory Liquidity Ratio, reduction in repo and reverse repo rates, liberalising access to external commercial borrowings, a fiscal package which includes additional plan expenditures, reduction in the ad valorem Cenvat rate and measures to support exports.

The combined impact of these measures is expected to have counter cyclical Impact on the domestic growth moderation. Quantifying and apportioning the gains between each measure is not feasible. As per RBI the GDP growth forecast for 2008-09 ranges between 7.5-8.0 percent. The real GDP growth during 2007-08 as per the Central Statistical Organisation is placed at 9 per cent.

This information was given by Shri Pawan Kumar Bansal, Minister of State for Finance in reply to a question raised by Shri Raj Mohinder Singh Majitha and Shri Ram Jethmalani in Rajya Sabha today. Countercyclical measures implemented to mitigate global financial shock and stabilise domestic growth expectations. The government and central bank implemented coordinated countercyclical measures-monetary easing through lower reserve ratios and policy rates, liberalisation of external commercial borrowing, a fiscal package increasing plan expenditure and reducing an ad valorem indirect tax rate, and export support-to mitigate a global financial shock, with authorities stating the economy is not in recession and noting growth expectations while observing that apportioning effects among measures is not feasible.