In a bid to allay fears among jittery investors following market bloodbath on Dalal Street on Thursday, Finance Minister Arun Jaitley on Friday assured that investors must keep faith in the inherent strength of Indian economy rather than getting swayed by the global headwinds.
“As major sell-off in global markets has created a chain reaction impacting the markets world over, including India, the Government will continue to pursue policies to support growth amid global slowdown,” Jaitley said.
A day after the stock market benchmark Sensex saw a massive 807-point plunge and rupee hit its 29-month low, Jaitley said, “It will be a part of prudent investment reaction that the inherent strength of Indian economy is kept in mind by investors, rather than react disproportionately to what the global developments are.”
On further push for gross domestic product (GDP) growth, Jaitley has said the Government is formulating policies and is conscious of the areas of support which are required to be given to the economy and fully committed to providing those support.
“Amid global slowdown, services and manufacturing sectors are both recovering and hopefully will improve further on account of monsoon and generate further demand,” Jaitley added.
On the mounting non-performing assets (NPAs) of public sector banks, he has said that the Government is considering more steps to empower banks to recover bad loans and the problem will be contained soon. “The bankruptcy law is under active consideration. The Government is also considering some further steps to empower banks to be in a position to recover these monies (NPAs). I think it is a problem which will soon come under control,” said Jaitley, who will present his second full budget on February 29.
There could be several reasons, which are predominantly outside the country -- the uncertainty in the Fed rate or what’s happening in Europe or the slowdown anticipated in China. “Now, these global factors will remain and will have to be tackled globally by those economies. There need not be any exaggerated panic in India for the reason that India as an economy even in the midst of global slowdown has clearly stood out to maintain a 7.5 per cent plus growth rate,” Jaitley said.