Expect more steps to ease liquidity: FM

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COS GETTING FRESH FDI IN SECTORS WHERE FDI CAPS HAVE GONE UP: SOURCES
NEW NORMS TO CONSIDER TOTAL FOREIGN INVESTMENT NOT TOTAL INVESTMENT: SRCS
CCEA NOD NEEDED ONLY FOR INVESTMENTS OF RS.1200 CR AND ABOVE: SOURCES
GOVT TO EASE NORMS FOR FDI REQUIRING CABINET APPROVAL: SOURCES
NO PLANS TO OFFER HOME LOANS AT 8%: NW
OCTOBER UNEMPLOYMENT RATE RISES TO 10.2% VS 9.8% (MOM)
EMPLOYERS CUT PAYROLLS BY 190,000 IN OCTOBER VS ESTIMATE OF 175,000
FOREIGN FUNDS NET BUY RS.587.02 CR IN EQUITIES ON NOVEMBER 6 (PROVISIONAL)
DOMESTIC FUNDS NET BUY RS.236.62 CR IN EQUITIES ON NOVEMBER 6 (PROVISIONAL)
KINGFISHER RAISES FUEL SURCHARGE BY RS.200 ON SECTORS MORE THAN 1000 KM
KINGFISHER RAISES FUEL SURCHARGE BY RS.100 ON SECTORS UPTO 1000 KM
JET AIRWAYS RAISES FUEL SURCHARGE BY RS.100-150 ON SECTORS UPTO 1000 KM
NET PROFIT AT $455 MN VS LOSS OF $24.6 BN (YOY)
TOTAL REVENUES AT $26.05 BN VS $898 MN (YOY)
MUTUAL FUNDS NET BUY RS.34.3 CR IN EQUITIES ON NOVEMBER 5
FOREIGN FUNDS NET BUY RS.267.6 CR ($56.8 MN) IN EQUITIES ON NOVEMBER 5
OVER 7% GROWTH ACHIEVABLE IN FY'11
TO EXPLORE STIMULUS EXIT MODE NOW; WINDING DOWN STIMULUS TO CUT DEFICIT
SENSEX UP 1.65%, NIFTY UP 1.8% FOR THE WEEK
CNX MIDCAP INDEX UP 3.9%, BSE SMALLCAP INDEX UP 1.6%
BSE PSU INDEX UP 4.77%, REALTY UP 4.4%, METAL INDEX UP 4%
INDEX GAINERS: BHARTI UP 9.4%, JP ASSOCIATES UP 8.6%, IDFC UP 7%
GETS U.S. FDA NOD FOR GENERIC ACULAR
TO RAISE UPTO $300 MN VIA FCCBS
EXTENDING 8% HOME LOAN SCHEME TILL 31ST MARCH , 2010
INDIAN RAILWAYS SHOULD RATIONALISE PASSENGER FARES UPWARD
TO RAILWAYS: STOP CROSS SUBSIDISING FARES AND FREIGHTS
IMPOSES 20% SAFEGUARD DUTY ON IMPORT OF SODA ASH
ROAD DEFICIT REMAINS THE GREATEST PROBLEM IN INFRASTRUCTURE IN INDIA
INDIA MAY TAKE TWO YEARS TO GET BACK TO 9% GROWTH

Updated: 10/10/2008 | 07:50 PM IST

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Press Trust of India

Friday, October 10, 2008 (New Delhi)

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Unfazed by the global financial crisis, Finance Minister P Chidambaram on Friday asserted that fundamentals of the Indian economy are strong and that savings in banks are "completely safe".

Earlier, as the stock market crashed under the pressure of global meltdown and the RBI cut the CRR by 1 per cent, the Finance Minister promised to address liquidity and other concerns of the economy.

He also announced the decision to constitute a group consisting of top bankers headed by Finance Secretary Arun Ramnathan, who is also Secretary (Financial Services) to make a quick assessment of the requirements of the liquidity and advise the government accordingly.

"Credit is the lifeline of trade, commerce and business and, hence, it is important that credit continues to flow to all sectors of the economy. In consultation with RBI and other regulatory authorities, government will address the liquidity and other concerns about the economy," Chidambaram said in a statement.

"It is also important to maintain our confidence in the Indian economy. As the Cabinet noted on Wednesday, the fundamentals of our economy are strong and there are many indicators which affirm the sound fundamentals," he said in the statement, released by the Finance Secretary.

Chidambaram, who is believed to have rescheduled his trip to Washington for attending the meetings of IMF-World Bank and G-20 leaders on the global crisis, stepped in after the BSE Sensex crashed by about 1100 points this morning. Prompt action by RBI and Chidambarm's statement helped a substantial recovery but the selling pressured emerged to leave the market volatile.

"I have requested the group to begin work immediately, also visit Mumbai and submit an interim report within a week," the Minister said.

Reacting to the measures, bankers said that though liquidity would remain a problem, interest rate may come down.

The Ramanathan group includes representative of RBI, TS Narayanaswamy, Chairman Indian Banks Association and CMD of Bank of India, UK Sinha, CMD UTI, Y M Deosthalee, CFO of L&T and Director Incharge of L&T Finance Ltd and R M Malla, CMD of SIDBI. The group has been authorised to coopt more members, if necessary.

Chidambaram welcomed the RBI decision to reduce the CRR by 100 basis points, thus making a total reduction of 150 basis points (since Monday) to inject a total of about Rs 60,000 crore into the banking system to avert a credit crunch.

"I welcome the decision of RBI. The Governor, RBI, has also assured the government that the RBI is keeping a close and continuous watch on the situation and will take appropriate steps according to the evolving situation," the Minister said.

He said that the group was set up following representations from banks, other financial entities and intermediaries, corporate, and small businesses that the issue of liquidity "must be addressed in a comprehensive manner".

"There have impressed upon me that intermediation of credit must take place smoothly and efficiently," he said. He recalled that on Wednesday the Cabinet reviewed the financial situation in India and authorised him to issue a statement on behalf of the government.

"We have identified that the main problem is liquidity and we have assured the people that we will respond swiftly and take steps to infuse more liquidity according to the needs of the situation. RBI was advised to take appropriate steps in this behalf," Chidambaram said.