Ghulam Nabi Azad says economic slowdown a world phenomenon, takes time to stabilize

Union Health and Family Welfare Minister Ghulam Nabi Azad on Wednesday defended the Congress-led UPA II Government that has been facing wrath over the economic slowdown, and said although the US economy is improving it would take another two-three years for things to stabilize.

"It is not possible that a miracle happens in India and this economic slowdown would take a U-turn. This is not possible. It is being observed that the US economy is slowly improving, but several European countries are still faring poorly," said Azad.

"So it seems that only after two-three years that the world would be released from the claws of economic slowdown," he added.

The rupee plunged to a new record low of 68.75 per dollar in the late morning trade on persistent dollar demand from banks and importers due to further fall in equity market amid rise in crude oil prices.

The SandP BSE benchmark Sensex plunges further by 473 points in the late morning trade on persistent selling pressure, triggered by sharp fall in the rupee value against the dollar coupled with sustained capital outflows by foreign funds.

Continuing its rising streak, gold prices climbed to cross Rs 34,500 per 10 gram level for the first time ever in futures trade today as rupee tumbled to hit an all-time low of Rs 68.75 amid a firming trend overseas.

The Finance Minister had earlier on Tuesday suggested a 10-point formula to revive the country's economic situation, and sought co-operation from all quarters despite ideological and political differences.

Chidambaram, who was replying to a discussion on the country's economic situation in the Lok Sabha, said the country needs more reforms, lesser restrictions and an open economy.

The Finance Minister said the fiscal deficit would be contained at 4.8 percent of the GDP even after doling out subsidies for the implementation of the Food Security Bill.

He said the government is doing everything to boost investment.

The Finance Minister also underlined the need to encourage manufacturing in sectors like power, steel, automobiles and textiles.

"We must increase production of electronics and textiles. We are importing things which we should not have imported. India can be strong only if we have a strong manufacturing economy," he said.