Sinha Hopeful Of Revival In Certain Sectors

Finance minister Yashwant Sinha today told the parliamentative consultative committee that incipient signs of revival are visible in certain sectors. He also said the current slowdown in the economy would be checked soon.

In the consultative committee meeting which discussed economic slowdown, Sinha based his optimism on the high forex reserves, large foodgrain stocks, low inflation rate and the soft interest rate regime.

According to Sinha, if the services sector clocked the average growth rate of 9 per cent as it did in the second half of the 1990s, the growth prospects of the Indian economy could improve.

The industrial outlook, however continued to be uncertain and a cause for considerable concern. The growth prospects had been affected due to the below-average monsoons in the previous consecutive years, droughts, floods and the Gujarat earthquate besides the global events.

The prospects for an early recovery in the global economy remain uncertain with the assault on World Trade Centre. The growth prospects for the current fiscal would also depend to a certain extent on the global developments and the bottoming out of the current slowdown in world output, trade and international capital flows.

Money supply expansion as per the Reserve Bank of India was expected to be about 14.5 per cent and ample to support an expansion of non-food credit to the tune of 16-17 per cent.

The current account deficit is expected to be well below 2 per cent of GDP even if non-oil imports show considerable increase in the event of a pick-up in economic activity.