Posts Tagged ‘Finance Secretary’

Dubai Woes to Hit India Hard? “No” Says India’s Think Tank :)

 

Dubai Woes to Hit India Hard? "No" Says India's Think Tank


Indian policy-makers
are not really worried over the potential adverse impact on the country’s economy because of the multi-billion-dollar debt default risk faced by Dubai World, ranked among the largest conglomerates in the region.

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Commerce Minister Anand Sharma said “India is a very large economy. It is a resilient economy”.

“I don’t think some development in real estate in Dubai will have an impact on the Indian economy” he added.

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He also said “As far as India is concerned, the housing, real estate sector and construction industry are all doing well.

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This is confirmed by the increasing demand for construction materials, cement and steel,”

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Finance Secretary Ashok Chawla also saw little impact of the Dubai World’s woes on the country’s economy.

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Though he was a trifle more circumspect and preferred to watch the situation before hazarding a guess.

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“We will have to study what the issue is, what is the problem, what will be the possible implication if any for the Indian economy, the people and corporates,” Chawla told.

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Asked if the crisis will impact money flows into India,since the Gulf region accounts for over half the total inward remittances worth over $25 billion annually from expatriate Indians,

Chawla said: “It’s unlikely.”

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The state-run Dubai World stunned the global financial world Thursday when it announced it would need to restructure its debt, estimated at $59 billion, to preempt default and asked creditors for a six-month deferment.

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The conglomerate, which has a host of companies under its fold, has interests in a wide range of businesses such as realty, infrastructure, logistics and economic zones.

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And that is not just in the region but across a clutch of countries including India.

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Indian equities reacted adversely to the development, with the benchmark sensitive index (Sensex) of the Bombay Stock Exchange (BSE) down as much as 634.16 points, or 3.76 percent, midway into the trading session Friday.

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It later recovered and closed with a loss of some 220 points, or 1.3 percent over the previous close.

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Indian markets have rallied more than 100 percent from the lows a year ago,mostly backed by news of recovery and not necessarily on fundamentals,”

said Jagannadham Thunuguntla of brokerage firm SMC Capital.

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“This is why such news will have a negative impact on our markets and we will be dragged down,” Thunuguntla, who heads the equities division of SMC Capital told.

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Even some Gulf-based companies, like Emmar, which have business interests in India, said there will be virtually no impact on their ongoing projects in India.

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The response was similar from India’s leading engineering and construction major Larsen and Toubro Ltd, which said its exposure in Dubai was around $20-$25 million.

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India To Press For Stimulus Package Continuance at G-20 Summit !

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India will seek continuance of the stimulus package that was devised to get the global economy out of the worst crisis since the Great Depression of the 1930s at the G-20 Summit in Pittsburgh .

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Prime Minister Manmohan Singh, who leads the Indian delegation at the summit being hosted by President Barack Obama, will voice developing countries views that the developed countries should return to the trend growth and stabilization of the banking and financial sectors.

Such measures affects exports, capital flows and investment of the developing economies.

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Indian PM is going to pitch strongly against any attempts at protectionism and advocating reforms of the international financial institutions in this G 20 Summit .

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Planning Commission Deputy Chairman Montek Singh Ahluwalia, National Security Adviser M K Narayanan, Finance Secretary Ashok Chawla are among the members of the Indian delegation which attending the summit.

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This Summit will also be attended by world leaders including British Prime Minister, German Chancellor, French PresidentΒ  among others.

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The summit represents 90 per cent of the world’s GDP, 80 per cent of the world trade and two-thirds of humanity.

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The summit is important for emerging economies like India, which have been affected by the global economic crisis not of its making, to tell the world that there was need to continue the stimulus package that was agreed at the Washington summit last November and a decision to pump in USD 1.1 trillion was decided at the London Summit in April last.

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Indian delegation are of view that the continuance of the stimulus package was in the interest of the poor countries and the emerging economies and developed economies should not adopt any strategy to exit from it.

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India will voice strongly the need for avoiding the temptation to resort to protectionism by the developed countries under the present crisis.

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