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Home News India Assocham condemns S&P report

Assocham condemns S&P report

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At a meeting with the Prime Minister Dr. Manmohan Singh today the ASSOCHAM President Mr. Rajkumar Dhoot submitted a memorandum suggesting measures to tackle issues like high fiscal deficit and inflation.

Mr. Dhoot dismissed the Standard and Poor’s assessment of the Indian economy and said there is nothing in the report which is revealing or new. While condemning the report he said “It looks as if the researchers have compiled together newspaper clippings and put out a paper, which is quite damaging for an economy which is among the top five in terms of purchasing power parity.”
 
“Let India and other emerging countries not become whipping boys for these global agencies. They do more harm than good to us in terms of building a worldwide negative perception” said Mr. Dhoot.
 
He further added “Let us not get rattled by these rating outlook and the threats. The Indian economy has an inherent strength and we never had any record of default in any of our international obligations”.
 
Mr. Dhoot pointed out that despite global slowdown, India’s infrastructure story is intact and is expected to grow for next 20-30 years. There would always remain a demand for the sectors like power, roads, ports, airports, containerization. On top of it, we need huge investment and there is a great scope for investment, both public and private in building of social infrastructure like schools, colleges, universities and hospitals. He emphasized the need for strong private sector involvement.
 
The delegation urged the Prime Minister that without losing time, Government should clear the big time infrastructure projects may be in the next three months. We also appeal and urge the Reserve Bank of India not to get misled by the headline inflation, which is around seven per cent. The core inflation is much lower clearly suggesting that there is a lot more scope to cut interest rates and generate demand in the system.
 
While the recent GDP data suggests deceleration in the investment to GDP ratio at 29 per cent, this is an issue which requires medium to long term solution. The immediate solution would be to generate demand since the industry has unutilized capacity. Once that is achieved, the consumer confidence will automatically boost investor confidence.


 

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