BJP cautions UPA on meltdown impact

Warning the UPA government against its 'complacency’, the opposition Bharatiya Janata Party (BJP) has asked for a quick sector-wise reality check to assess the likely impact of the Western financial meltdown on India.

Prakash Javadekar, spokesperson, who voiced the BJP’s worries on the impact of the crisis a third time during recent weeks, said that not only fallout of the global crisis but several domestic trends also did not auger well for the financial sector.

He said the index of industrial production had fallen from 12.9 per cent in September 2007 to 1.3 per cent this year. With inflation rate hovering around 12 per cent and agriculture growth failing to cross the 3 per cent growth mark, the situation was likely to worsen in India.

"All these indications clearly point towards a home bound crisis along with the global financial crisis that is impacting the world," he said.
The BJP leader claimed that the flight of $12bn from the country was likely to have a long term negative impact on the markets.

Referring to reports about banks facing liquidity crunch and stopping lending even to the oil companies, and an impending slowdown in real estate, Javdekar said, "a bigger crisis was likely to unfold".

He asked the government not to live with a premise that India would remain insulated from the global crisis. "The government must be vigilant and be seen as taking real decisions in coming days to avoid the pain in store," he said.

Earlier Jaswant Singh, former finance minister, and Ravi Shankar Prasad had cautioned the UPA government on the impact of the global financial crisis.