Inflows will be affected

With markets abroad tumbling as the fate of US bailout package hangs in balance, a key Finance Ministry official on Tuesday said that the global financial crisis will hurt capital inflows in India.

"The situation is staring on the face of huge mind-boggling crisis in the western world, especially the US. There will be shortage of money in the country, that is the financial crisis is to hurt capital inflows in India," Economic Affairs Secretary Ashok Chawla said in a seminar here.

At the same seminar, stock market regulator C B Bhave said once the crisis is over, India will come stronger and the balance would be in the country's favour. He also said in the future, there will be more open market in the recently-launched currency futures.

Former chairman of PM economic advisory panel C Rangarajan said, "We are going through an international crisis which we cannot ignore."

Yesterday, the US House of Representatives had rejected around USD 700 billion bailout package, sending stock markets around the world into a tailspin.

After coming into major selling pressure yesterday and in the early morning trade today, Indian markets recovered after Bhave's statement that there is no panic and no settlement issues in the markets.