The Hindu : National : Jaswant cautions Centre on global meltdown

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Jaswant cautions Centre on global meltdown

Neena Vyas

NEW DELHI: Bharatiya Janata Party leader Jaswant Singh has cautioned the United Progressive Alliance government against complacence over the effects of the global economic meltdown on the Indian economy.

Disagreeing with Finance Minister P. Chidambaram that the economy was more or less insulated from the effects of the global crisis, Mr. Singh said the real estate boom bubble in India could burst; there was an unnatural growth of consumer retail credit promoting a sense of prosperity based on borrowed money; and high inflation and high interest rates together with declining industrial activity would lead to stagflation.

He warned that the present global crisis could next hit pension funds and the insurance sector.

Euphoria

While Mr Singh complained that the UPA government was creating euphoria about economic growth not based on reality, he did not agree that the Vajpayee government had also promoted this through its ‘India Shining’ campaign ahead of the 2004 Lok Sabha polls or that it had also encouraged the boom in consumer retail credit.

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