India in better shape to tackle global crisis: FM

India's fundamentals are strong and the country is in a better shape than other nations to meet the challenges arising out of the latest global financial turmoil, Finance Minister Pranab Mukherjee said. However, he added that there could be some impact on the Indian economy from the uncertain economic conditions in the US and the eurozone. "The recent developments in the US and the Eurozone have injected certain uncertainty in global markets. These developments could have some impact on India. But as India's growth story is intact and its fundamentals strong, we are in a better position than many other nations to manage the challenge," Mukherjee said.



India could see increased FII inflows unlike the 2008 global crisis, as it offers much superior returns vis-a-vis other countries, the Finance Minister told reporters in New Delhi. Mukherjee said there could be some impact on capital and trade flows in the short-term, but as India's growth story is strong FIIs could view it as an attractive investment destination. He didn't rule out temporary FII outflows though. He also said that implementation of pending reforms could be fast tracked. "The Government will fast track the implementation of pending reforms and keep a close eye on international developments," Mukherjee said.

"India's institutions are strong and we are prepared to address any concern that may arise on account of the present global situation," Mukherjee said. The Government would also focus on encouraging greater domestic consumption and give greater impetus to the drivers of domestic growth. He said that softening of the international commodity prices, especially crude oil, will help check inflationary pressures in India. "It will also help in maintaining the fiscal balance for FY12," he said. On the steps being taken by RBI, he said that in the immediate future the central bank's priority is to ensure that adequate rupee and foreign exchange liquidity are maintained to prevent excessive volatility in the interest rates and exchange rates.