Shut the ... Govt to Assocham

Taking strong exception to industry chamber Assocham's forecast that a quarter of people in certain key sectors will lose jobs in the next ten days, government on Friday said the economy is poised for the other way.

"The Deputy Chairman of the Planning Commission and my colleague Jairam Ramesh (Minister of State for Commerce) have taken serious exceptions to an Assocham report... The pace of job creation may slow down but that doesn't mean that jobs are being destroyed," Finance Minister P Chidambaram told reporters here.

The Minister further said another industry chamber FICCI too had contradicted the Assocham study, which had said that in the next ten days or so about 25 to 30 percent employees are likely to lose jobs in seven sectors including aviation, information technology, steel, financial services, real estate, cement and construction.

Chidambaram further said that 7 percent growth rate, the lowest projection made by experts, would "create more job than was done in entire NDA regime, when the growth was only 5.8 percent. Why this question was not raised when the economy was growing at 5.3 percent?"

Replying to questions on the recent report on slowing of the US economy, the Minister said, "when the world output slows down, the growth in developed countries slows down... it will have an indirect impact on India."

However, he added, "the India economy is domestic consumption and investment driven economy. Exports will play a significant role but not as much as they do in China."

Pointing out that at the moment it was difficult to estimate the impact of global economic slowdown on exports, Chidambaram said in April-August 2008-09 it grew by 35.1 percent though September showed a slight dip.

"We will see as we go along... but we are not happy that any country's economy should contract. We want all countries' economies to grow," the Minister said adding India was not happy with slowing down in the US economy. "But it is there... that's a reality," he said.

With regard to the inflation rate, which has come down to below 11 percent after four months, the Minister said, "let us hope the measures that we have taken will have an impact."

The annual rate of inflation has come down to 10.68 percent for the week ending October 18.

Replying questions on India's stand on G-20 meeting on global economy, Chidambaram said, "it is being formulated and hopefully we will be able to give some details in the next few days."

Finance Minister earlier in the week held a meeting of experts, including RBI Governor D Subbarao, SEBI Chairman C B Bhave and former RBI Governors C Rangarajan and Bimal Jalan among others, to formulate the views on global financial crisis that India would take at the G-20 meeting called by US President George Bush in Washington on November 15.