In a strong message to a critical India Inc, Finance Minister Pranab Mukherjee today said the government is "not sitting idle" and indicated that RBI may also cut interest rates on Monday to arrest slowdown.
In his first public address after being nominated as the UPA candidate for the Presidential elections, Mukherjee said government was taking steps to address concerns expressed by global agencies like Standard & Poor's and the industry.
"As Finance Minister, I cannot ignore the ground realities...I do not dismiss their concern. I take serious note of their concern and try to find out what is to be done," he said while addressing an Assocham conference here.
Indicating that RBI too will be joining the government in dealing with the slowdown, he said "I am confident that keeping in view all the factors, the RBI will adjust the monetary policy as we are adjusting the fiscal policy".
RBI is expected to cut rates in its review of monetary policy on Monday in the face of the economic growth slipping to a nine-year low of 6.5% during 2011-12.
Mukherjee listed growing burden of petroleum subsidy as one of the difficult areas before the Centre for which he appealed to the States to reduce their taxes.
As far as state finances in 2011-12 were concerned, he said, they were quite satisfactory. He has written to the States that Centre will also respond but it has to be balanced because "if the federal finance becomes weak, nobody will be able to bailout Indian economy."
On Eurozone crisis, Mukherjee said, India is as concerned as others whether Greece will remain part of the currency union, as the developments are also impacting value of rupee. Rupee has lost against dollar by about 20% in the last one year.
Industry leaders like Azim Premji and N R Narayana Murthy have blamed the government of policy paralysis.