Pranab Mukherjee says govt aware of magnitude of the global crisis

20 Feb 2009 | 11:03 Pranab Mukherjee says govt aware of magnitude of the global crisis

Finance Minister Pranab Mukherjee today, 20 February 2009, said the government is conscious of the magnitude of the deepening global crisis and has been taking steps to mitigate its impact on the Indian society. Jobs must be protected even if it means some reduction in compensation at various levels, he added.

Two days back, the Reserve Bank of India (RBI) governor D Subbarao said the impact of the global recession on India was sharper than expected.

The government has so far announced two stimulus packages including tax cuts and the capital injections for banks to shield the domestic economy from the impact of the global financial sector crisis and recession in key global economies.

However, share prices tumbled earlier this week as an interim budget for 2009-2010 announced on 16 February 2009 did not provide an anticipated stimulus for the economy. If the government really intends to take more measures to stimulate domestic demand, it will have to do so as early as it can given that it won't be able to announce major policy decision once the mode code of conduct is in force. Once the model code of conduct comes into force after the announcement of poll dates, any announcement by the government will be subject to Election Commission's (EC) scrutiny.

The Central Statistical Organisation (CSO) has pegged India's projected GDP growth for the year ending March 2009 at 7.1%, the slowest in six years and below the previous year's 9%.

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