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India can be source of stability for global economy: FinMin Mukherjee

Aug 29, 2011 3:32:52 PM - www.ft.lk

New Delhi: India’s Finance Minister Pranab Mukherjee Monday said the country can be a source of stability for global economy, even as fears of an economic downturn following cut in the US sovereign debt rating and escalating debt worries in the Euro zone have gripped the world. However, Mukherjee threw in a note of warning saying India needs to be alert in responding to the various global events as he expressed concern over the unprecedented US rating cut by Standard & Poor’s from the cherished AAA to AA+ with a negative outlook on August 5, 2011.

Following the US rating downgrade, markets across the globe including the Indian stock exchanges tumbled, reminiscent of the crash in equity markets in 2008 after the downfall of US-based financial services firm Lehman Brothers that marked the beginning of a recession. Indian officials have displayed optimism so far despite the domestic capital markets taking sharp thrashing following the US rating downgrade. The Bombay Stock Exchange (BSE) hit a 19-month low on August 26, 2011, landing below the psychologically important 16,000 mark.