Weekend Edition: India immune to meltdown?

GLOBAL MELTDOWN: Desperate measures are being taken to restore confidence in markets across the world.

          

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A devastating financial crisis has put the world economy on the brink of a recession. Can the Indian economy weather the storm and should Indian investors get into panic mode? From government bail-outs to unprecedented interest rate cuts, desperate measures are being taken to restore confidence in panic-stricken markets across the world.

The big question that was being asked by CNN-IBN's Editor-in-Chief Rajdeep Sardesai on The Weekend Edition was: Is India no longer immune to a global financial crisis? Joining him on the show to try and answer the question were Deputy Chairman of the Planning Commission Montek Singh Alhuwalia and senior journalist and economic analyst Paranjoy Guha Thakurta.

RECESSION FEARS

After Friday's figures of the Index of Industrial Production (IIP) number showed just one per cent for the month of August, people are beginning to fear that the country is headed towards a recession.

Montek Singh Alhuwalia was extremely confident when he said that India was not headed for a recession.

"We have been saying all along that we are working and living in a global world so there are interconnections. You are seeing a financial tsunami. Industrialised countries may be heading into a recession. This may have an impact on growth in India. The growth rate this year will be lower than it was last year. Last year we had over nine per cent growth, this year, we estimated about 7.5 to 8 per cent. Depending on how bad the international situation is, we might come to the lower end of the range, but that is very different from a recession," he said.

"I wouldn't put much weight on just one month's industrial production index. There have been situations in the past where one month figures get revised," he added.