Govt calibrating eco policies to deal with eurozone crisis
New Delhi: The government on Wednesday said it is adjusting its economic policies to deal with the impact of eurozone crisis.
"The uncertainty in global financial markets due to recent developments in the euro-zone had some impact on India. Government has been calibrating economic policies to mitigate the impact," Minister of State for Finance Namo Narain Meena said in a written reply to the Lok Sabha.
India's economic growth rate has slowed to a nine year low of 5.3 percent in the January-March quarter of 2011-12, from a 9.2 percent growth in the Q4 of 2010-11 fiscal.
"The downturn reflects the continued high inflation as well as the impact of other adverse global and domestic macro economic factors," Meena said in a separate reply.
The global factors include the crisis in the Eurozone and the near recessionary conditions prevailing in Europe, sluggish growth in several industrialised economies, hardening of international prices of crude oil.
Besides, tightening of monetary policy in order to control inflation resulted in slowing down of investment and growth. The industrial growth rate declined to 2.4 percent in May, from 6.2 percent a year ago.
The Wholesale price based inflation stood at 7.25 percent, while the retail inflation was at 10.02 percent in June.
He said that the significant increase in food inflation in recent months was driven largely by the increase in vegetable prices. The food inflation in June stood at 10.78 percent.