New Delhi: Union Minister Pranab Mukherjee on Friday said he saw no signs of the global economic crisis abating in the near future and prescribed higher public spending to prop up rural economy in developing countries to begin a turnaround.
With the financial meltdown eating into global economic growth, including India's own, External Affairs Minister Pranab Mukherjee, who also holds the Finance Ministry portfolio, warned that ignoring rural economy could prove to be disastrous.
"The speed and ferocity of this crisis does not indicate any signs of abating. There are still no indications as to how (crisis) will progress and as to when it will bottom out," he said, addressing a conference on financial crisis and global economic governance organised by Research and Information System (RIS) in New Delhi.
The International Monetary Fund has already cut global growth forecast for 2009 to 0.5 per cent from 2.2 per cent predicted only three months ago. Indian economy, which had seen over nine per cent growth for four years, is expected to see just near seven per cent expansion.
"The global financial institutions need to put more resources for the developing countries in rural economy, build social infrastructure... As next year's outlook is more downbeat... the Government will take further steps to ensure that the labour-intensive sectors are less adversely affected," Mukherjee said.
"As this is a watershed moment in the history of the modern world, we need to think hard about the shape of its future... resources must be put in institutional capacity building," Mukherjee said at the conference attended, among others, by Asian Development Bank President Haruhiko Kuroda.
The minister said he saw the need to revisit Gandhian economics with emphasis on rural self-help and sustainable economic development. "Anything contrary would be disastrous."
Nearly 70 per cent of India's population depends on agriculture for income and for long, the criticism has been that the bolting economic growth of the past few years has not fully percolated to the rural areas.
Mukherjee said since next year's economic outlook was "more downbeat," the government has taken and will take further steps to ensure that labour intensive sectors are less adversely affected.
Commerce Secretary GK Pillai had this week, quoting estimates, said that about 1.5 million people employed in export sector would be out of jobs by March this year.
Meanwhile Commerce Minister Kamal Nath said the Reserve Bank of India (RBI) could adjust monetary policy as inflation is cooling off now.
"We look at everything that stimulates the economy which is appropriate. We can't as government also has limitations in this. The problem is not domestic. We are being affected, seismic tremors of the downtrend for the global economy. And no measures of the government can cure the global economy. It needs liquidity, the crisis flows from a collapse of the financial system, which leads to liquidity dissipating," said Kamal Nath.
Comments
0 comment