New Delhi: (IANS) Blaming the weakness in the global economy for the recent slowdown in India’s industrial output and economic growth, Finance Minister Pranab Mukherjee said Tuesday the government was not suffering from any policy paralysis and the Indian economy has the resilience to overcome the crisis.
“Questions have been raised: Have we entered into recession, have we entered into a phase where the economy is going to be derailed, have we entered into a situation where we cannot improve the situation and move ahead,” Mukherjee said in the Rajya Sabha.
These perceptions were not true and the Indian economy has the capacity and resilience to over the crisis, the finance minister asserted.
“If you look at the performance of the economy, particularly in the crisis situation, you will notice that India workers, Indian farmers, Indian entrepreneurs have the capacity and resilience to overcome the crisis,” he said.
Mukherjee said the government was not suffering from any policy paralysis and was capable of taking important decisions.
“The perception that there is paralysis in the decision making process, government does not function, it is not true,” Mukherjee said in the upper house of parliament.
Mukherjee pointed out that in the last few months the government had taken decisions on several important issues, including on national manufacturing policy and allowing foreign direct investments in retail aimed to boost economic growth.
India’s economic growth has decelerated sharply this year. The growth declined to 7.7 percent in the first quarter of 2011-12 and it fell further to 6.9 percent in the second quarter against the government’s budgetary target of around 9 percent.
Industrial output slumped into negative territory in October, raising fears of overall slowdown in the economy. Factory output, measured in terms of the Index of Industrial Production (IIP), slumped to minus-5.1 percent in October, according to the official data released Monday.
Mukherjee blamed the ongoing crisis in Europe and other parts of the world for the slowdown in the Indian economy. “Indian economy cannot remain isolated from the global developments.”
However, the finance minister expressed hope that things were likely soon to improve in the major development countries, including the US and Europe.
“If the major developed economies revive or start the process of recovery, India has the resilience to take advantage of it,” he said.