'India confident of weathering global crisis'

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London, November 19:: India is confident of weathering the current global financial crisis and is on track to become the world's third largest economy by 2035 as predicted by experts, India's High Commissioner to the UK Shiv Shankar Mukherjee has said.

"Much of what India aspires to achieve could have been put in jeopardy by the ongoing global credit crunch and financial crisis that is nudging many developed countries towards recession. However, the prudent financial sector regulation that India was criticised for in the past appears to have saved its economy from this crisis," he said here last night while presenting a talk entitled "India, Quo Vadis".

"That, along with the fact that the Indian economy is essentially domestic driven. The primary drivers of growth are domestic consumption and investment, which remain healthy.

Domestic savings and capital formation continue to be around 34-36 per cent of GDP.

"Thus, GDP growth rates for the current year have been scaled down only by a percentage point to 7 1/2 to 8 per cent. As a result, India remains largely on track to become the world's third largest economy by 2035 and second largest by 2050, as predicted by Goldman Sachs in BRICS report, which said India's contribution to the world economy will be high and increasing as it fulfils its growth potential and becomes a motor for the global economy."

The event, sponsored by the Bank of Baroda which is celebrating its Centenary this year, was presided by its Chief Executive Officer, UK and Europe, S S Mundra.

The High Commissioner said: "India is determined to carry forward the Confidence Building Measures with Pakistan, even in the face of negative incidents like the attack on the Indian Mission in Kabul."

India, Mukherjee said, would like to see a stable Pakistan. "We will be ready to go the extra mile in achieving it," he said.

Asked how India could justify its "moon mission" when millions were still under the poverty line, Mukherjee said the two were not incompatible. "We can not restrict our commitment to science and technology while eradicating poverty."

He also pointed out that India's space programme was most cost effective programme in the world.

Replying a question on the current global financial crisis, Mukherjee said it might affect India's exports as America and Europe are India's biggest export markets. "This has been compensated by oil price fall and even dollar drop is hugely helpful."

In addition to socio-economic challenges, he said perhaps the most important ones facing India today are political challenges and threats.

"Among the most dangerous of these is terrorism, which our Prime Minister has called the greatest security threat of our time," he said, adding we look forward to a prosperous future with hope and optimism, given the performance of the last six decades.

The High Commissioner noted that India success story is, however, still very much "work in progress".

"Innumerable challenges remain - of inadequate infrastructure; of providing the huge young populace with quality education and equipping them with marketable skills; of increasing productivity of agriculture which continues to employ 52 per cent of the workforce but contributes only 18 per cent of GDP; and of making growth more inclusive.