FM appeals to world leaders to work for co-ordinated action

New Delhi, Oct 20 (UNI) Stating that it was a ''testing time for the world and for globalisation'', Finance MInister P Chidambaram today urged world leaders to work in ''close cooperation'' to ensure that the financial crisis does not worsen the living conditions of the poor of the globe.

Addressing a function here to mark 50 years of Indo-German Bilateral Cooperation Development, Mr Chidambaram said Indian financial markets would only be ''indirectly'' affected by the global liquidity crisis. Thus, the imact on India would be limited, Mr Chidambaram said.

Describing the global situation as ''one of the most difficult in modern history'', Mr Chidambaram, however, said the Indian economy would still be able to clock an eight per cent growth in the current fiscal.

The Finance Minister said the country's financial system had ''sound fundamentals'', adding that Indian markets were ''transparent and efficient''.

However, the global cash crunch will indicrectly affect India's financial markets in a limited manner.

Mr Chidambaram said the growth prospects of the Indian economy had been affected mainly due to the high fuel prices that ruled high for most of the year.

Stating that inflation was an ''iniquitous tax'' coming harshly on the poor, Mr Chidambaram said inflation rate crossed the 12 per cent mark, mainly due to the country's dependence on oil imports.

The Finance Minister said 94 per cent of the week-on-week increase in inflation was attributable to petroleum products.

UNI GS SBA RK2128