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India's economy robust; growth story intact: FM
Finance Minister Pranab Mukherjee on Friday asserted that India's economy is 'robust' and its growth story is intact, amid fears of another global economic turmoil that sent the world stocks into a tailspin.
"Its (India's) fundamentals are strong and they look more attractive in a world confronting problems," the finance ministry said in a statement after Mukherjee reviewed the economic situation with Reserve Bank Governor D Subbarao and PMEAC chairman C Rangarajan in the wake of debt crisis in the United States and Euro zone.
The Bombay Stock Exchange benchmark Sensex tanked to 15-month low on all-round selling in two successive days that wiped off over Rs 2 lakh crore (Rs 2 trillion) investors wealth.
Continuing their sharp fall for the second straight trading session on Friday, Asian stocks plunged by as much as six per cent. European indices too were deep in the red in the afternoon trade.
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India's economy robust; growth story intact: FM
The statement said that in comparison to the sharp fall in the indices in US and Europe, the Indian indices have 'weathered any contagion effect'.
Indian bourses are not as badly hit as others in Asia, and the country is well positioned to absorb the potential foreign fund inflows. "As the advanced economies grapple with their problems, India is better positioned than most other nations to meet its problems," the finance ministry said.
India has already been upgraded to 'market weight' by some global investment banks from 'underweight' and "this is a testimony to the strength of the Indian economy," it said.
The statement further added that the crisis in the Western world presents an opportunity for India to attract investments from foreign funds.
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India's economy robust; growth story intact: FM
"The present crisis can be expected to encourage increase in the equity exposure by foreign pension funds and other long term institutional investors. India is well-positioned to capture this flow," the finance ministry said.
Mukherjee said the present challenge would in the long run give India greater opportunities for growth. He also expressed confidence in India's ability to emerge stronger from the present situation.
Meanwhile, the hefty outflow of foreign funds saw the benchmark Sensex of the Bombay Stock Exchange dipping below the 16,000 points level during the day on panic selling.
The Sensex plunged by 481.01 points in intra-day trade but recovered partly to close nearly 328 points lower at 16,141.67 points. On the other hand, gold prices touched a record Rs 28,000 per 10 grams.
So far this month, the foreign investors have pulled out a net Rs 1,028.50 crore (about $227 million) from Indian markets.