Innovative approach will pull economy out of slowdown: Pranab

The economic environment is a matter of concern but there is no reason to be pessimistic, said President Pranab Mukherjee during his first visit to Chennai.

He was speaking at a function organised by the Madras Chamber of Commerce and Industry recently to felicitate him. He said industry leaders should not have negative sentiment and suggested to tap domestic opportunities.

"The GDP has slowed down, inflation is reasonably high and environment for fresh investment is not bright," he said, adding the current account deficit was likely to rise and fiscal deficit was a matter of concern.

But India is not the only one facing the crisis. "The world environment is not encouraging. No country can live in isolation. International events have had an impact on the domestic economy," he said.

Though domestic saving was not as high as 36 per cent, reported in 2007-08, it was still high at 32-34

per cent. He also not many countries were doing better than India. "The IMF is revising forecast of developed economies and the resolution of eurozone crisis is not in the horizon of visibility."

On the slowdown, Mukherjee said, "The first quarter growth of 5.5 per cent was no doubt disappointing. Policy formulations at the domestic level alone cannot solve the crisis."

However, the President was confident that the fundamentals of the Indian economy were strong. "In course of time there will be difficulties and it may seem insurmountable," he said while commenting on the current economic scenario. According to him, nothing could be more dangerous than negative sentiments.

He said domestic demand-driven growth strategy was most important at this juncture. Innovative approach and appropriate planning would go a long way in pulling the economy out of the slowdown.