India remains 2nd fastest growing economy

FE 23/12/08

 

The Indian economy continues to remain the second-fastest growing economy in the world, a top economist said on Tuesday.

 

“India’s economic fundamentals are quite robust and its economy remains the second-fastest growing one in the world,” the Prime Minister’s Economic Advisory Council’s Chairman Suresh Tendulkar said in Mumbai.

 

India was not experiencing a recession as other advanced economies and its economy would not be affected to the same extent as some other emerging Asian economies, he said.

 

On MSMEs, Tendulkar said that the present economic slowdown would test the strength of the sector.

 

“Rising interest rates in the recent past has further accentuated the credit crunch for MSME entrepreneurs,” he added.

 

According to him, the financial meltdown in advanced economies “has been very serious”.

 

“The depth of recession in advanced countries has been greater than anticipated a few months back,” Tendulkar said, adding that export-linked sectors in India “are bound to be affected much more than anticipated earlier owing to the depth of recession in advanced economies”.

 

He described the foreign exchange reserve position in the country as “comfortable” despite FII outflows causing some depletion.

 

The current account deficit, would be well within limits, but it might be wider than in the earlier years, he said.

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