Finance Secretary Ashok Chawla on Monday maintained that India would remain immune to the Greek debt crisis. In fact, the Euro zone crisis might actually help the country in being regarded as a ‘relatively safer haven' for global capital.
Interacting with the media on the sidelines of a conference organised by the Associated Chambers of Commerce and Industry of India (Assocham) here, Mr. Chawla said that although the crisis in Greece crisis could cause some turmoil in the Euro zone, no major impact would be there on the international financial community. “I think we are immune. We were immune when there was a much larger international financial crisis. The Greece crisis is much smaller in scale and magnitude to what the world has seen in the last one-and-a-half years,” he said.
Earlier, inaugurating the conference on ‘Banking and financial regulators' Mr. Chawla noted that the Euro zone sovereign debt crisis would have “minimum effect” on India's exports in the current fiscal, especially as it had a good track record of successfully overcoming a much bigger global financial crisis in the recent past. There was no need to be apprehensive on this front as the situation would shortly improve, he said.
Alongside, the Finance Secretary admitted that India's exports to European markets could face some problems in the short-term owing to the Euro zone's ongoing financial crisis. In the long run, however, the impact would be negligible as the current crisis in Europe was going to be a temporary affair. The domestic capital market, he said, would also absorb the fallout of the crisis in that FII investments into India would continue and their flight to other destinations was unlikely.
The Indian economy, Mr. Chawla said, would grow at close to 8 per cent as the domestic market would be able to cushion the adverse impact of temporary setbacks in overseas economies. While the economy would move on to double-digit growth, the challenge for policy makers would be to make this growth inclusive, he said.
In his keynote address, SEBI Member K. M. Abraham regretted that neither the capital market regulator nor the government and policy makers had devoted the required time and energy to evolve measures for ensuring inclusive growth. Mr. Abraham stressed the need for expanding the banking net in villages as the various social schemes of the UPA Government had led to rise in income levels and this capital should be put to more productive use.
