India needs to stand firm in times of crisis: Pranab Mukherjee

NEW DELHI: Finance minister Pranab Mukherjee said that country needs to stand firm amid the economy crisis prevailing in the world markets. "A series of bad news is coming. First we had the IIP index (at 3.3% in July) lowest in two years, and (now) lengthening shadow of the euro zone crisis all over the market in the world has become matter of concern," Mukherjee said on the sidelines of a conference organised by economic think-tank ICRIER.

"But at the same time, we cannot lose our nerve," he added.

Mukherjee said the growth in most advanced economies has declined in the second quarter of 2011, and emerging markets are witnessing a combination of moderation in growth and rising inflation.

"There is widespread apprehension that even the tepid global economic recovery, that we have seen so far, is stalling," he said.

Mukherjee added that globally the economies are facing the challenges of fiscal imbalances, regulation, development, and commodity markets. "We shall have to work collectively and see that we can overcome the impasse," he said.

The developments in European Union have rattled markets globally. He said the recent commodity and food price rise and their volatility have further induced considerable threat to economic growth and food security in energy-dependent emerging economies.

On the G-20 development agenda, he called for recycling of global savings for infrastructure investments. "Enhancing infrastructure investments in emerging economies and developing countries would have positive spin-off for rebalancing global demand. It would result in real investment with tangible growth," he said.

Meanwhile, a top government official said that India will decide on its government borrowing schedule for the second half of the current financial year on October 3. He, however, ruled out any change in the limit. "As of now, there is no change in the borrowing target. We (finance ministry and RBI officials) are meeting on October 3," economic affairs secretary R Gopalan said on the sidelines of a CII conference.

The government has set a gross borrowing target of $88.5 billion for the current fiscal.

There are apprehensions among analysts that the government would overshoot its fiscal deficit and borrowing targets in the backdrop of a slowing domestic economy, high global crude prices and mounting global economic uncertainty.