Finance Minister Yashwant Sinha on Monday said the current international developments have adversely affected the Indian economy in several ways, covering the stock and foreign exchange markets, tourism and civil aviation and foreign investment. Talking to reporters on the sidelines of an insurance summit, Sinha said the government was taking measures to somewhat insulate the economy from such external factors.
Asked to elaborate, he said efforts were on to raise domestic demand for items hit by the slump in exports. To a question whether any bank rate cut was in the pipeline, he said that was not the only solution. Earlier, in his inaugural address at the two-day insurance conference, Sinha said nothing was worse for economic growth than ``uncertainty and instability`` which had now arisen in the wake of the international developments.
The reasons for the current slowdown were both global as well as purely domestic, he said.
He asked the new private players in the insurance sector to widen coverage to rural areas, besides evolving new products in life, health and other general insurance wings. Generation of funds for long-gestation projects such as infrastructure depended much on the performance of the insurance and pension sectors where the public locked up savings for a long period, he added.
Bureau Report