India has so far escaped any serious impact from the worsening malaise settling on economies worldwide, but the country’s financial gurus are making sure India is on a solid footing come what may, according to The Economic Times.
Domestic demand is the factor of the moment. Aditya Birla Group’s chief economist Ajit Ranade says Indian consumption will probably remain insulated: “If we handle the situation carefully, we can come through unscathed.”
Heavy-handed stimulus of the economy has been warned against, however, by industry figures like Shankar Acharya, an economic professor and former chief financial advisor to the government.
He says the action taken so far to shore up the economy has been swift and accurate, but any further steps would be negative.
Mr Ranade believes further steps are needed. “A coordinated approach towards monetary and fiscal policy is needed to maintain robust aggregate demand,” he said. “Monetary measures, in form of rate cuts, will come. We also need much more action from the fiscal front.”
“One thing is very clear; if the stock market does not revive, the ability to raise resources will be restricted,” said Tata group’s chief economic advisor Mr Sidhartha Roy.
“Investments may slow but consumption demand has not been impacted yet.”
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