CHENNAI, June 29: There is "evidence to suggest" that the country is coming out of recession, Union finance minister Yashwant Sinha said at a press conference in Chennai on Monday. He also claimed that there were "no indications to suggest that interest rates will harden". Observing that the Reserve Bank of India's (RBI) policy was investor-friendly, he said: "The only danger is the government borrowings pushing up the interest rates, but I don't see that happening."Exuding confidence over the performance of the economy for the year 1998-99, the minister said that during its 100 days in office, the BJP government had taken important policy decisions and reversed some of the policies which had affected the performance of the economy earlier.
"The information I have received on industrial production and tax collection for the month of April tend to suggest that things are improving," Sinha said. Blaming a "temporary mismatch in demand and supply" for the fall in the rupee's value, Sinha assured that therewas no need to get panicky and that stable value would be determined by the market itself.
"The responsibility of the government would be restricted to keeping the macro fundamentals in balance and ensuring that there is no undue volatility in the exchange market," he said, adding that the US dollar had also strengthened against various other currencies.
He said that none of the projects, major or minor, would be stalled as a result of the sanctions as there were `other avenues' to raise funds. He said that people made much noise about sanctions and how it will bite etc but his decision to ignore the sanctions in his recent budget stands vindicated.
He further said that discussions were on between the ministry, the RBI and Sebi for framing a suitable policy for the non-banking finance companies (NBFCs) and that a new set of measures would soon be announced which would take care of the interests of both the investors and the NBFCs. Sinha also said that the finance ministry has expedited theinvestigations against the Indian Bank scam and was proceeding under the supervision of the Supreme Court.
Probe into BSE volatility
The SEBI and the BSE are, under the instruction of the finance ministry, investigating the role played by certain brokers in the unusual market movements witnessed at the BSE in the last few days. Finance minister Yashwant Sinha said that the manner in which the stock market behaved "has more to it than what meets the eye", forcing the ministry to look into the matter. He evaded an answer as to whether any FIIs were involved by saying that he had not "asked for the details."
Copyright © 1998 Indian Express Newspapers (Bombay) Ltd.
