Finance minister Yashwant Sinha on Wednesday said the country's economic fundamentals were strong enough to ward off the impact of a possible war with nuclear rival Pakistan. But Sinha hoped there would be no war as uncertainties of any kind were not good for economic growth. "We have at this point of time very comfortable foreign exchange reserves, comfortable food grain reserves, low inflation," he said in an interview in New Delhi.
"These give us the strength to face the consequences of a conflict much better than the flexibility that Pakistan has." Tension between the traditional foes has surged after the December 13 attack on Parliament which killed 14 people, including the five attackers.
India blamed the attack on Pakistan-based Kashmiri separatists and demanded Islamabad crush two groups.
The two neighbours have rushed troops and military hardware to the tense frontier as a war of words heats up. But Sinha said India was prepared to meet any eventuality and did not anticipate any pressure on its creaky fiscal situation "at any point of time if such a pressure were to arise".
India's fiscal gap widened to 5.2 per cent of gross domestic product in 2000-01 (April-March) due to lower than-expected tax revenues, and analysts say the government is also likely to miss this year's target of 4.7 per cent of GDP because of poor revenues. Bureau Report