The eurozone crisis and global slowdown have negatively impacted India's economy through decreased exports, a wider trade deficit, lower capital flows, a declining rupee, falling stock markets, and lower growth. While the government and Reserve Bank are taking steps to address the rupee's steep fall, export and capital investment sectors have been most affected. Dismal economic indicators have also dampened business sentiment in India. The government introduced a bill to regulate microfinance institutions and cap interest rates on loans in response to high inflation and slow growth.

1. NEW DELHI: With India’s
macro-economic indicators
continuing to show a weak-
ening trend, the govern-
ment, on Tuesday, said the
eurozone crisis and the con-
sequent global slowdown
has had its impact the coun-
try’s GDP, but assured that
the government is taking
measures to tackle it.
“The global slowdown due
to unfolding of eurozone sov-
ereigndebtcrisishas,inter-alia,
impacted the Indian economy
through deceleration in ex-
ports, widening of trade and
currentaccountdeficit,decline
incapitalflows,fallinthevalue
of Indian Rupee, stock market
decline and lower economic
growth," Finance Minister
Pranab Mukherjee said in a
written reply to the Rajya Sab-
ha.
Mukherjeealsosaidthatthe
government and the Reserve
Bank of India are taking steps
to curb the steep fall in the ru-
pee,whichslidto55.47against
the dollar on Tuesday. He said
the export oriented industries
and the capital investment are
the most affected sectors.
The dismal economic indi-
cators have dampened busi-
ness sentiments. Last month,
global credit ratings agency
Standard & Poor’s lowered its
outlook on India to “negative”
from “stable”and warned of a
ratingsdowngradecitingdete-
riorating economic indicators
and slow progress on fiscal re-
forms in the backdrop of a
weakened political setting .
A persistently high inflation
andsluggisheconomicgrowth
has forced the RBI to raise
ratesasmanyas13timesinthe
past year leading to a high in-
terest rate and lower savings.
MFI Bill introduced
The government, on Tuesday,
introduced a bill in the Lok
SabhatoempowertheReserve
Bank to regulate the industry
and fix interest rates cap on
loans provided by them.
Finance Minister Pranab
MukherjeeintroducedtheMi-
cro Finance Institutions (De-
velopment and Regulation)
Bill,2012,inLokSabha,which
among other things also pro-
poses laws for fair and reason-
able recovery of loans.
DH News Service
Eurozone
crisis is
impacting
India: FM
Dismaleconomicmilieu
hashitbizsentiments