‘Indian economy to start reviving in three to six months’

March 26th, 2009 - 7:50 pm ICT by IANS  

Kolkata, March 26 (IANS) The Indian economy, grappling with the current global slowdown, would start reviving in three to six months, a senior government official said here Thursday.
“I am reasonably hopeful that the monetary and the fiscal policies (taken by the government) would play themselves out,” Suresh Tendulkar, chairman of the Economic Advisory Council to the Prime Minister, said at a seminar here.

“A lower interest regime is coming into effect and with that I expect the economic revival process to start in three to six months time,” Tendulkar said at the seminar on the impact of the global economic meltdown on India, organised by Merchants’ Chamber of Commerce.

Maintaining that India’s balance of payments was in a “reasonably comfortable zone”, Tendulkar said the current account deficit was also not expected to expand much.

He, however, admitted that the level of the economic slowdown was much deeper than perceived earlier.

“Since we are integrated with the world economic market, we cannot escape the consequences. If we have enjoyed boom, we have to experienced bust too. But we are less affected than other Asian countries because of our hesitant process of integration.”

Despite the slowdown, domestic demand “barring the leveraged component of metropolitan demand” has not been significantly affected, he said.

Tendulkar said Indian banks were well capitalised and that the number of non-performing assets (NPA) are low. At the same time, he averred, higher risk aversion measures by the banks were “not so good” as it impacted consumption and intensified slowdown.

Referring to the agricultural sector, he said the dip in its growth in the third quarter this fiscal was based on the second advance estimate of agriculture output, which would be revised. “If you compare latest estimate based on advance estimate of October-December 2008 with October-December 2007, agriculture growth has gone up by 2.5 percent.”

Tendulkar ruled out chances of an economic recession and deflation in the country.

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