Economy to turn around soon: FM, Dr. Pranab Mukherjee

RBI had already cut short term lending rate (Repo) by 4.25 percentage points, short term borrowing rate (Reverse Repo) by 2.75 percentage points and mandatory cash requirements for banks (CRR) by four percentage points.

Dr. Pranab Mukherjee's, clarion call, asking all Banks/Financial Institutions to further cut interest rates, augurs well for the Construction/ Real Estate and Automobile sectors. The next phase of bull run is about to begin in these sectors (Real Estate/Construction and Automobile). Besides due to overall improvement of the world economy, the Automobile sector is expected to show its teeth again....Moreover, high crude oil price will push people to go for more and more fuel efficient cars discarding the old ones, which could give further positive triggers to the automobile sector......Hence keep your seat belts fixed and prepare to ride on the "Bull Express"....

I am glad to announce that yesterday (10th June, 2009) this blog received the highest number of hits till now, 841 (eight hundred forty one) in 24 hours, surpassing, 9th June, 2009's record of 824 hits in 24 hours; though the revenue generated from this blog during that period was as usual dismal.....

NEW DELHI: Buoyed by better than expected economic growth last fiscal, Finance Minister Pranab Mukherjee on Wednesday expressed hope that the economy, spurred by fiscal and monetary stimulus packages, would turn around soon.

"I hope that the impact of various pro-growth measures would help turn around the economy soon. As a result of various measures announced by the government and RBI, today we are looking at our economy with a lot of hope," Mukherjee told the heads of PSU banks here.

He said the last quarter GDP growth figure of 5.8 per cent and the annual growth of around 6.7 per cent for 2008-09 is a pointer towards this direction.

Despite contraction in manufacturing output in the fourth quarter last fiscal, economic growth figures were well in the range projected by RBI - 6.5-7 per cent - and better than what many had forecast.

The Finance Minister's remarks assumes importance as the Prime Minister had yesterday said India can grow at 8-9 per cent despite the global slowdown.

Mukherjee also said, "The stock market also seems to be quite bullish. Prime lending rates of banks have come down to the range of 12-12.25 per cent as against 13.75-14.25 per cent six months back."

The benchmark equity index Sensex has gained 56 per cent this calendar year to close at 15,466.81 points today.

The government, has so far, given three stimulus packages by cutting excise duty by six per cent, service tax by two per cent and increasing public expenditure apart from taking other sector-specific measures.

Besides, RBI also loosened money supply by cutting its policy rates to make funds available to the industry at a cheap rate.

RBI had cut short term lending rate (Repo) by 4.25 percentage points, short term borrowing rate (Reverse Repo) by 2.75 percentage points and mandatory cash requirements for banks (CRR) by four percentage points.

"The unwinding of earlier tightening measures and the relaxation in risk weights and provisioning norms facilitated flow of credit to the sector under stress," Mukherjee said. [With inputs from Internet]