New Delhi: Amid a global financial meltdown, Prime Minister Manmohan Singh on Monday said India should be prepared for a “temporary” economic slowdown as like other countries, it also faces the “ripple effect” of the world crisis.
“We must be prepared for a temporary slowdown in the Indian economy,” he said while making a statement on impact of global financial crisis on India in the Lok Sabha.
“India, like other developing countries, is experiencing the ripple effects of the financial crisis. However, we have taken a number of steps to minimise the impact,” he said.
Pointing out that precise impact of the global crisis is difficult to estimate as the depth and duration of the slowdown remained uncertain, Singh said, “our effort will be to minimise the negative effect of the financial crisis and, once the global situation stablises, to return to the growth trajectory of 9%.”
For the current year, he said, some estimates project the Gross Domestic Product (GDP) growth rate to decelerate to 7.5% during 2008-09 from 9% a year ago. “While the most pessimistic estimates place it no less than 7%,” he said.
Singh said in anticipation of a slowdown, the government had stepped up public expenditure in the budget for 2008-09.
“...increased public expenditure is an important part of the solution. Our expenditure on education, health, NREGP, NRHM, AIBP, JNNURM and other programmes will, I believe, stand us in good stead in the difficult times”, he said.
Besides, Singh said, the debt waiver and debt relief amounting to Rs65,000 crore to 3.6 crore farmers will also greatly benefit the farmers and enthuse them to increase production.