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He admitted there is a liquidity crunch in the market and that the economy was facing 'spill over and ripple' effects of the global storm but held out an assurance that the "RBI is ready to take further steps and infuse more liquidity if necessary".
Referring to the current global meltdown, Chidambaram said "there is a storm blowing in the world. We did not create the storm. We are facing the spillover effects or the ripple effects of the storm.
"We must brace ourself and weather the storm. I am confident that the Indian economy is strong and resilient to weather the storm and I would request all players in the economy to cooperate with the government in weathering the storm," he told PTI.
Chidambaram said "the weekend is a good time for people to reflect. Firstly, those who have money... there have been wage increases for the government servants, and many have received Diwali bonuses.
"Those who have money should spend some money and should save some money. Savings in banks are completely safe.
Our banks are well regulated and well capitalised. Depending on your risk threshold you can save in some other instruments.
Someone with a low risk threshold should save in a bank," he said.
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Should Chidambaram be trusted? Indian politicos are no better in terms of credibility when compared to the western counterparts. We have all seen Hank,Ben and even German counselor err .Suffice it to say, make sure sure you park funds within the government insured limits (Depository insurance limit) and in approved banks.Invest in stocks only if you have a beyond average risk tolerance, that is if you have funds beyond reasonable living expense taken into consideration.
India is a strong economy and will continue to prosper well despite the global financial meltdown. I wish all Indians well and the best.
Instead of playing with CRR, Interest rates etc.. why not allow the Black-Money to come into the Equity Market with a lock-in period of Five years before the month-end? This will not cause any inflationary pressure and at the same time bring a lot of liquidity into the system. Otherwise, at least instruct all Govt Institutiions to buy up shares of Public Sector companies if they go below their Book Value. Do something innovative.