India’s growth, financial system will be protected: PM

November 3rd, 2008 - 2:24 pm ICT by IANS  

Manmohan SinghNew Delhi, Nov 3 (IANS) Prime Minister Manmohan Singh Monday said the country’s growth and the financial system would be protected from the fallout of what he termed as an “unprecedented crisis” and “abnormal situation” in the global economy and asked India Inc to refrain from “knee-jerk” reactions like large-scale lay-offs.Meeting with the presidents of apex chambers and leading industrialists at his South Block office Monday, the prime minister said steps were taken in recent weeks to lessen the impact of global financial crisis and that further measures will be taken to protect the country’s economic growth.

“We’re meeting at a time when the world economy is going through unprecedented crisis, which started in the financial sector in the US, but has now spread globally,” the prime minister said.

“We recognise that the situation is abnormal and we need to be constantly on the alert. The situation is being watched on a day-to-day basis and more steps will be taken if required,” he added.

“While every effort needs to be made to cut costs and raise productivity, I hope there will be no knee-jerk reaction such as large scale lay-offs which may lead to a negative spiral.”

According to him, the first priority of his United Progressive Alliance (UPA) government was to protect the Indian financial system from a possible loss of confidence or contagion effects.

“I am happy to say that the direct exposure of our banks to problem assets is minimal. Our banks are well regulated and also well capitalised,” he said.

“I think we have successfully conveyed to our people that our banking system, both in the public and the private sector, is safe, and the government stands behind it and that no one should fear for the safety of bank deposits.”

The prime minister said the corporate sector also had a role to play. “Industry must bear in mind its societal obligations in coping with the effects of this global crisis,” he said.

“Government and industry must act in a true spirit of partnership to meet the challenges that lie ahead.”

Those invited to the meeting included presidents of the three apex chambers - Rajeev Chandrasekhar of the Federation of Indian Chambers of Commerce and Industry (FICCI), K.V. Kamath of the Confederation of Indian Industry (CII) and Sajjan Jindal of the Associated Chambers of Commerce and Industry of India (Assocham).

Reliance Industries chairman Mukesh Ambani, Reliance Anil Dhirubhai Ambani Group chairman Anil Ambani, Bharti Group chairman Sunil Mittal, DLF chairman K.P. Singh and Infosys co-chairman Nandan Nilekani were also invited.

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