Government policies aim to end India’s economic woes: PM

Prime Minister Manmohan Singh today said there was reason for concern over the economic slowdown and the volatility in foreign exchange markets, but defended his government's policies, saying these were aimed at bringing the situation under control.

Addressing the annual meeting of the Associated Chambers of Indian Commerce and Industry (Assocham) in New Delhi, Manmohan Singh said, "I know there are concerns on slowdown. Our country is going through a difficult period and the most immediate cause of worry is the recent volatility in foreign exchange markets."

Singh attributed the rupee decline to a widening Current Account Deficit (CAD) and global factors, and hoped that the steps taken by the Reserve Bank of India to arrest the fall of the Indian currency would ease speculative pressure.

As regards the economy, he said though basic fundamentals were stable and sound, the growth rate in the current financial year was likely to be lower than 6.5 per cent estimated at the time of presentation of the union budget in February.

"I appeal to each one of you not to be overcome by negative sentiment," Singh told the business leaders present. "When things are going well, government should interfere as little as possible. When things go badly, it is the responsibility of the government to become pro-active."

He said further said, "The impact of initiatives taken by the government will be felt in the second half of the current fiscal. We will leave no stone unturned to ensure that economy rebounds."

Speaking on the steps that need to be taken to stabilise the economy, Singh said, "There is a need to push our exports; depreciation of the rupee will help but it will take time. We need to reduce import of gold and demand for petroleum products."