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"Falling inflation is not indicative of coming recession in the economy...No fear of recession," Economic Affairs Secretary Ashok Chawla said, while commenting on the third quarterly review of the credit policy announced by the central bank.
Noting that inflation is coming down to a more realistic level, he said,"... definitely it shows that demand has slowed down. What we have is a situation of downturn and not recession."
Having touched a peak of 12.91 per cent in August 2008, inflation came down to below 6 per cent in January and according to the RBI's assessment of economy, the rate may slip further to 3 per cent by March end.
Referring to availability of funds, Chawla said, "RBI has taken steps and there is adequate liquidity in the system...but transmission of credit has to be more effective."
The RBI, he added, would continue to monitor situation and take steps as and when needed.
As per the RBI review, the central bank has since mid-September augmented actual/potential liquidity by about Rs 3,88,000 crore.
Although the RBI has been gradually reducing key policy rates and ratios, it refrained from taking any major initiative during the third quarterly review of the policy.
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Good job will pay of big time ! Previous crises need to be sent a thank you note !
Indian economy has a lot of domestic potential unlike China, which primarily depends on exports. Time for India to fully focus on infrastructure such as roads, power and water projects and food self sufficiency- not just food grains, but also edible oils. We should not depend on Malaysia or Indonesia for cooking oils.
everyone knows its election time....and india isnt immune to world recession. jobs are being lost left right and center. projections are slashed everywhere. the slowdown's been happening since beginning of last year. so there... spin doctors getting busy