US financial turmoil not to have much impact on India: PMEAC

NEW DELHI: The Prime Minister's economic panel on Friday said the US financial turmoil will not have much impact on India unless there is mess up in the domestic market.

Indian economy is largely domestic demand-driven, though not completely insulated from the US financial crisis, Prime Minister's Economic Advisory Council Chairman Suresh Tendulkar said at a seminar here.

"Domestic factors seem to be much more prominent than the international factors," he said. Unless there is big mess up in the domestic market, US financial crisis would not have much impact, Tendulkar said.

"Given the sort of integration taking place in the Indian economy with the global economy, we cannot be impervious to it."

In 2008-09, Tendulkar said, the GDP growth would be more or less in line with expectation. "It is next two fiscal that we need to worry about."

The panel will look at the GDP forecast in January, he said. The PMEAC in its recent report projected Indian economy to grow at a 7.7 per cent rate for the current fiscal, down from 9 per cent recorded during the previous year.

The economy clocked a 7.9 per cent growth rate in the first quarter of this fiscal.

Earlier during the day, Prime Minister Manmohan Singh had a meeting with Cabinet colleagues in the light of the evolving global situation.

He asked them to to stay alert on the global financial crisis even as he exuded confidence that there is no impact on the Indian economy.