India will take all steps to protect growth - PM
Monday, November 3rd, 2008
NEW DELHI (Reuters) - India will take all necessary monetary and fiscal steps to protect economic growth with the global financial crisis now likely to be more severe and prolonged, the prime minister said on Monday.
The Reserve Bank of India (RBI) on Saturday unexpectedly cut its main short-term lending rate for the second time in as many weeks to ease a growing cash squeeze, spur faltering economic growth and fend off damage from the financial crisis.
Analysts said the surprise RBI move, coming just a week after it left rates unchanged at a policy review, showed its concern that strains on Asia’s third-largest economy were quickly becoming more severe.
“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,” Singh told top business leaders.
“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.”
India’s economy has grown at or above 9 percent for the past three fiscal years, but is expected to expand less than 8 percent this year as the global slowdown reduces exports. Industrial output grew at an annual rate of just 1.3 percent in August.