Global slowdown affecting Indian economy: FM

Singapore, Mar 27: Finance Minister P Chidambaram said, a slowdown in the world economy with investors preferrring to wait and watch will have an obvious negative effects on future economic growth in India. ''The global slowdown, rising inflation and subdued interest in investment make for a combination that can have only negative consequences for developing countries,'' he said at the Lee Kuan Yew School of Public Policy in Singapore, yesterday.

We believe that the measures announced in the recent Indian budget should encourage both domestic and foreign investors to continue to have faith in the Indian growth story added Mr Chidambaram, who is expecting the economy to grow by nine per cent in the current fiscal year.

The budget's new measures include reducing income tax, expanding the corporate debt market and increasing spending on education, health and infrastructure. The high food prices were due to diversion of food items to produce biofuel, he pointed out, noting that the United States was using 20 per cent of its corn to produce biofuel.

The minister felt that the escalating oil prices were another example of 'greed overtaking the common good of the world.' But Mr Chidambaram assured that India's economic growth is targetted to achieve social objectives such as free and compulsory education for children, improvement of nutrition, standards of living and public health, and full employment as well as living wages for all workers.

UNI