Indian economy will turnaround: Chidambaram

DESARAJU SURYA
Hyderabad: India's economy will see a turnaround from October 2009 though it will continue to pass through difficult times in the first two quarters of the 2009-10 fiscal, according to Union Home Minister P Chidambaram. "The 2009-10 financial year will be a difficult one for our economy but there will be a turnaround from October or little thereafter," Chidambaram -- who till recently headed the finance ministry -- said addressing a meeting after inaugurating the Union Bank of India's 2501 branch here. Asserting that India would register a 7 per cent growth in economy, he said a "right mix of policies and leadership" was required to steer the country through these difficult times. "Our economy did well even in slowdown thanks to our strong banking, insurance and services sector. Besides, our farmers too have contributed to the growth story because of which our economic growth rate has been close to 9 per cent," Chidambaram observed and quoted US President Barack Obama as saying that only Indian and Chinese economies remained sturdy despite the global meltdown. Expressing satisfaction that "we tamed inflation," the Union Minister noted that inflation would go down further in the coming months. "Inflation remained a monster seven months ago but we successfully tamed it," he pointed out. He urged banks to further cut down lending rates in tune with the downward trend in inflation. "Interest rates must be modified when there is an opportunity. Banks, right now, have been investing more than lending but they should step up lending and stand by the customers in difficult times. We still need greater policy support in this regard," Chidambaram said. Loans must be rescheduled, more capital should be pumped in and more working capital should also be made available to sustain growth, he added.
Chidambaram also launched the networking of branches of UBI-sponsored regional rural banks under core banking solutions. UBI became the first public sector bank to network all its rural bank branches under CBS, with technological support from Infosys. Union Bank of India chairman and managing director M V Nair was also present on the occasion.