Srinagar: In the face of a bloodbath in the global markets, Prime Minister Manmohan Singh on Friday put up a brave face stating there is no question of Indian economy slipping into recession.
"Economy will grow by 7.5-8 per cent this fiscal. There is no question of a recession," Singh said at a press conference.
He said the Government was keeping a constant watch on the situation arising out of the worldwide liquidity crisis.
"The situation is being watched on a day-to-day and hour-to-hour basis. We will take appropriate steps to protect our economy," the Prime Minister asserted.
Singh said India's banking system "is not affected to the same degree as in the western countries".
He, however, agreed that capital outflows from the country were exerting pressure on the liquidity and rupee exchange rate.
In the past 10 days alone, foreign institutional investors have pulled out close to a billion dollars from the Indian bourses, which has not only devastated the stock indices but also weakened the rupee that touched an all-time low of Rs 49.30 against the US dollar before recovering slightly to close the day at Rs 48.45/46.
Earlier, the RBI announced a further cut of 100 basis points in the Cash Reserve Ratio that would inject an additional Rs 40,000 crore in the banking system. This would be over an above Rs 20,000 crore infusion that was to result from the 50 basis points CRR cut announced earlier.
However, this could not check slide in the stock market, which saw the benchmark Sensex tanking over 800 points.
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