Indian mkts less affected than Asian, European peers: Govt
September, 07th 2011
The government today said Indian stock market is less affected compared to some of the major Asian and European markets on account of developments in the US and the Eurozone region.
"The uncertainty in the global markets due to recent development in United States of America (USA) and the Eurozone has had some impact on major markets across the globe, including India," Minister of State for Finance Namo Narain Meena said in written reply to the Rajya Sabha.
However, Indian markets were less affected as compared to some of the major Asian and European markets, he said.
Last month, global rating agency Standard & Poor's (S&P) downgraded the US government's 'AAA' sovereign credit rating to AA+ with a negative outlook. This was the first time since 1917 that the US credit rating was revised.
Meena said, the Indian economy is comparatively less dependent on exports. It is primarily dependent on domestic drivers for its growth.
In addition, he said, Indian exports have also seen appreciable growth in 2011-12 and are today more geographically diversified.
Indian banking sector is robust and the calibrated approach to capital account convertibility has prevented surge and reversal of debt creating capital flows, he said, adding, the Indian economy also has strong fundamentals.
Meena also said that fluctuations in the markets are not unusual. Market movements are the outcome of perceptions of the investors about the economy, its various sectors and companies.
This perception is influenced by many factors, including the macroeconomic environment, the growth potential of the economy, performance of companies, corporate governance, policy initiatives of the government, domestic and international events and the market sentiments, he said.
He also said that the government maintains a close watch on global developments and action is taken when necessary to protect its markets.
Government and financial sector regulators are constantly endeavouring to build systems and practices to deepen and broaden the markets, he said.
In response to another question, Meena said the household savings stood at Rs 15,36,071 crore at the end of March 2009-10 compared to Rs 13,31,033 crore in 2008-09.
Meena, in a separate reply, said banks have been advised to ensure that the educational loan scheme is implemented in letter and spirit.
The performance of public sector banks (PSBs) under educational loan scheme is reviewed on an ongoing basis, he said.
As per information furnished by Indian Banks' Association (IBA), he said, the public sector banks had sanctioned Rs 15,207 crore education loans in 5.42 lakh accounts during the year ended March 31, 2011.
The amount of the disbursement was Rs 11,200 crore in 8.11 lakh accounts during the year, he added.
Replying to another question, Meena said the government, in May 2010 advised PSBs, IBA and National Housing Bank that no pre-payment charges may be levied by the lending institutions when the loan amount is paid by the borrowers out of their own funds.
If any pre-payment charges are to be imposed on housing loans, the same need to be reasonable and transparent and not out of line with the average cost of providing these services, he said.
The PSBs have reported that by and large they do not levy any pre-payment charges when the amount is paid by the borrowers from their own sources, he said.
In general, he said, own funds means funds generated through 'own sources' and not through borrowings by any lender.
Replying to another question, Meena said, the GDP at market price in 2010-11 increased by 20% to Rs 78,75,627 crore compared to Rs 65,50,271 crore in 2009-10.
At the same time, external debt rose by 15.9% to Rs 13,66,117 crore in the last fiscal against Rs 11,79,096 in 2009-10.