More measures coming to revive growth momentum: Montek
Plan panel Deputy Chairman Montek Singh Ahluwalia has said more such measures as announced by RBI today are in the offing to revive growth momentum and boost inflow of foreign funds.
"We will soon see a set of measures apart from what has also been announced, particularly, on implementation of large projects on which the Prime Minister has set up new mechanism to move things faster, " Ahluwalia told reporters after the RBI announced measures to boost foreign funds inflow.
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Reserve Bank in consultation with the government has raised the FII investment limit in government securities by $5 billion to $20 billion.
Besides, it also allowed Indian companies in manufacturing and infrastructure sector to avail of External Commercial Borrowings (ECBs) of up to $10 billion for repayment of outstanding rupee loans and for fresh projects with certain conditions.
"I have seen the measures. They are encouraging basically the larger flow of resources. I think it is certainly a step in the right direction, " Ahluwalia said while commenting on the measure announced by RBI.
He rejected the view that measures are inadequate as the markets did not react positively and rupee slid further immediately after the measures were announced by the RBI.
After climbing to seven weeks high, the BSE benchmark Sensex fell by over 90 points and the rupee which opened at 56.44, depreciated to 57.92 per dollar immediately after the measures were announced.
"Markets move up..Markets move down. I would not judge the measures by what market does on any one day. I think this is a very unsettle time for markets anyway. Market movements do not necessarily always reflect, what is the long term position," he said.
Commenting on the rupee depreciation, he said: "It is true that rupee has depreciated a lot. This has been a year in which currencies everywhere in the world are highly unstable. But I think the underline strength of the Indian Economy are more than what the rupee movement suggests," Ahluwalia added.
According to the latest data, the economic growth stood at a nine year low of 6.5% in 2011-12 and at 5.3% in the January-March quarter.