New Delhi, Aug. 7 (ANI): Union Finance Minister Pranab Mukherjee on Friday told the Lok Sabha that the economy has started moving upward due to two stimulus packages in the last fiscal, but scanty rainfall this year may play a spoilsport.
"The economy has started moving slightly, but still I am not quite sure because other problems may come from adverse impact of scanty rainfall. My colleague, the Agriculture Minister is making the assessment. This is a problem and this problem is a reality and we trying to handle it," Mukherjee said, replying to a question on slowdown of credit between September2008 and June 2009.
When the industrial crisis engulfed developed countries and the financial meltdown became a major financial crisis all over the world, it had its worst impact; Mukherjee said adding that credit is required for investment, for carrying business and using it for productive purposes.
"The movement of economy is not just like switch off or switch on. Even if we take action today by adjusting the credit policy, it will take some more time to get its full impact on the overall economy," Mukherjee said.
He said the main reason for deceleration of credit growth was sharp slowdown in growth of the economy during the latter half of 2008-09 with both industry and export sector recording negative growth for several months.
Murli Manohar Joshi (BJP) questioned government's policy of heavy borrowing in the current financial year to nearly four lakh crore rupees.
To this, the Finance Minister assured the House that there was no reason for elbowing out the small and medium industries, which need credit.
"This will be a balancing act and we will take measures after consulting the Reserve Bank of India (RBI) to ensure that the private sector is not elbowed out in the market," he said. (ANI)