India could be an engine for global economic revival: RBI governor

IBEF: March 16, 2009


New Delhi: The Indian economy is likely to recover much earlier from the impact of the global downturn than other countries, according to Reserve Bank of India (RBI), the country's central bank's governor, Mr D Subbarao, who however did not forecast the timeline for the same. Mr Subbarao, currently participating in the Group-20 meet being held at London, told a prominent global broadcaster that India could be an engine for global economic revival.

"India can be a growth engine. Not that India can recover ahead of the world. But when recovery starts, India's recovery is going to be sharp and rapid," said Subbarao. He further added that the slowdown has hit the Indian economy in financial and manufacturing sectors, and it is difficult to predict when the economic recovery will occur.

However, India's financial sector still remains sound, safe and well-capitalised, thanks to the prudent policy actions initiated by the government and the Reserve Bank, the governor said. Major actions taken include the two stimulus packages announced by the government and several key interest rate cuts by RBI.

Mr Subbarao also claimed that India had benefitted from globalisation and would continue implementing similar strategies. “Globalisation is a double-edged sword. It comes with benefits and costs, so I don't think pulling out of the global system is an option for any country,” he added.