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Eurozone crisis has impacted Indian economy: Pranab

Export oriented industries, capital investment are most affected sectors

Press Trust of India  |  New Delhi 

The Government today said the global slow down due to the crisis has impacted the Indian economy and steps are being taken to tackle the situation.

"Global slowdown due to unfolding of sovereign debt crisis has, inter-alia, impacted the Indian economy through deceleration in exports, widening of trade and current account deficit, decline in capital flows, fall in the value of Indian Rupee, stock market decline and lower economic growth," Finance Minister said in a written reply to the

Export oriented industries and the capital investment are the most affected sectors, he said.Mukherjee said the government is taking a number of steps to arrest the decline of rupee, which breached the psychological 55-level yesterday.

A number of steps have been taken to augment the supply of foreign exchange to stem rupee decline, he said adding measures have also been taken to increase direct foreign investment for infrastructural development.

He said the steps included liberalisation of external commercial borrowings (ECB) policy and portfolio investment norms besides steps to improve access to corporate bond market through

The RBI has also taken initiatives to curb speculation in the foreign exchange market, he said.

This included raising of NRI deposit interest rates, easing availability of export credit and stipulation that 50% of balances in the Exchange Earner's Foreign Currency Account be converted into rupees balances, he said.

"A number of legisgative measures/amendments have also been taken for fiscal consolidation/reforms and financial sector reforms", Mukherjee said.

First Published: Tue, May 22 2012. 17:20 IST