New Delhi: Amid a fall in the stock markets in the wake of economic problems in the US, Finance Minister Pranab Mukherjee today said India’s fundamentals are strong and the government is ready to address any concern that may arise, while admitting there could be some impact.
“We would focus on encouraging greater domestic consumption and give impetus to the drivers of domestic growth”, Mukherjee said while talking to reporters outside Parliament.
The government, he further said, will fast track the implementation of the pending reforms while keeping an close watch on international developments.
India, Mukherjee said, is in a better position than other nations to meet the challenge posed by the developments in the US and the Eurozone.
The Finance Minister expressed confidence that India could see faster and greater FII inflows unlike after 2008 meltdown, in view of the higher returns that global investors could get here.
“The recent developments in the US and the Eurozone have injected certain uncertainty in global markets. These developments could have some impact on India. But as India’s growth story is intact and its fundamentals strong, we are in a better position than many other nations to manage the challenge,” he said. Mukherjee said there could be “some impact” on capital and trade flows “but as India’s growth story is strong we could see FIIs viewing India as an attractive investment destination even if there is any temporary outflow”.
Mukherjee asserted that India’s institutions are strong and “we are prepared to address any concern that may arise on account of the present situation”.
His statement came as the stock markets plunged by over 500 points before witnessing some recovery.
The finance minister said softening of global commodity prices, especially oil, will help check inflationary pressures.