India leaves Davos hale & hearty

Written by Agencies | Davos, January 27: | Updated: Jan 27 2008, 22:10pm hrs
'If the US sneezes, India need not catch a cold!' was New Dehi's message to global business and political leaders as they prepared to leave this snow-clad mountain resort after spending five days worrying about a possible recession in the world's largest economy.

While it is not the first time that India has articulated this theory, Finance Minister P Chidambaram used the World Economic Forum to get across the message that India was fairly insulated from the global financial crisis - which he said was the result of failure of regulators and lack of regulations.

Although India did not suffer any impact due to the US mortgage crisis, the year ahead could be difficult as there could be indirect implications for the services sector - dependent economy.

"Long-term effects of the crisis spreading from one market to the other will have to be carefully measured and responded appropriately," Chidambaram said.

He, however, said that despite fears of global recession, Indian economy will grow by 8.5 per cent in 2008-09 fiscal.

"We are by and large a de-coupled system (not linked to global economic situation due to high dependence on domestic market). Indian financial system including banking, insurance, pensions and assets management companies (which are also not linked) can bear these shocks," ICICI Bank CEO and Managing Director K V Kamath said.

A falling US dollar, rising oil prices, and the journey of the US economy toward a possible recession had robbed this high-profile annual meet of its vibrancy, but things could have been much worse.

"If that 80 billion dollars (by Sovereign Wealth Funds of China, Singapore and Middle East) had not come in time, consequences could had been dire," Kamath noted.