As the global economic crisis unfolds, India expects further moderation in foreign capital flows and exports leading to slowdown in economy, minister of state for finance P K Bansal told the Rajya Sabha on Tuesday.
"While the exact effects of the slowdown of the American economy are difficult to quantify because of the complexity of the crisis...it is expected that there may be some moderation in India's capital flows and in the growth of exports," he said in a written reply.
Referring to the impact of crisis on the country, Bansal, to another query said, "Industrial activity, particularly in the manufacturing and infrastructure sectors, is decelerating."
The services sector, the minister said, too is slowing down 'mainly in construction, transport and communication, trade, hotels and restaurants sub-sectors'.
Following the global crisis, the country's foreign exchange reserves declined to less than $250 billion from over $300 towards the beginning of the fiscal.
As per the official data for October, the industrial production declined by 0.4 per cent, while the exports dropped by over 12 per cent.
To another question, Bansal said as a fallout of the global financial crisis, though overseas operations of banks have suffered mark-to-market losses, none of the public sector banks having overseas operations have reported credit losses as on September 30 this year.
"Some of the Indian banks have suffered marked-to-market losses on account of the exposure of their foreign offices to credit derivative and investments. . .All the PSBs having overseas operations have reported nil credit losses as on September 30, 2008," he said.
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