PM asks ministers to be on alert on global financial turmoil

NEW DELHI: With the US financial turmoil sending shock waves to various parts of the world, Prime Minister Manmohan Singh today asked cabinet ministers to stay alert on the unfolding situation.

Singh's caution came during the meeting of the Cabinet Committee on Economic Affairs after Finance Minister P Chidambaram briefed about the financial crisis in the US while stating the Indian economy was not affected by the developments.

Taking the cue, stock markets showed a buoyancy in minutes with the BSE benchmark equity index surging by over 500 points by the mid-day.

"The Prime Minister asked the ministers to stay alert on the global financial situation," Rural Development Minister Raghuvansh Prasad Singh told reporters after the CCEA meeting.

Chidambaram briefed the meeting and said that there is no impact of the US financial turmoil on the Indian economy, Singh said.

Stock markets zoomed up with frantic buying activity after these remarks, which boosted investors' confidence.

Prime Minister's Economic Advisory Council Chairman Suresh Tendulkar also said today that Indian economy is largely domestic demand-driven and would not be impacted much by the US financial crisis unless there is mess-up in the domestic markets.

Indian economy is largely domestic demand-driven, though not completely insulated from the US financial crisis, he said at a seminar here.

"Domestic factors seem to be much more prominent than the international factors," he said.