Indian Prime Minister Manmohan Singh has expressed concerns over Moody's recent downgrade of Indian GDP growth to 5.5 per cent due to deficient monsoon, rising prices and policy-inaction. India's UPA government is trying hard to save the image of India as an investment destination but due to recent scams and pending bills in Parliament, the investor sentiment has turned bearish for high growth economy.
Indian Prime Minister Manmohan Singh has expressed his positive view about Indian economy and has suggested that the GDP growth would be better than previous year. The domestic demand in India is rising and this isolates the country from worsening conditions of world economy to some extent. However, with decline in FDI, the growth momentum could be difficult to sustain.
Indian currency has declined quite sharply over the last two months compared to US dollar and Euro. The exporters are enjoying better margins, but the country is facing bigger import bills. Massive portion of India's imports include crude oil. The government has been able to deregulate price of petrol but is still offering subsidy on price of diesel and cooking gas. The recent rise in price of petrol has fueled inflation.
The interest rates are high in India and most businesses are not having easy access to capital for expansion. The higher rate of interest has also made things difficult for existing loans for business and home users.
Prime Minister Manmohan Singh has asserted that Indian economy is fundamentally strong. He has earlier given assurance to investors that the government will push forward with reforms process in upcoming session and the nation will emerge as a better investment destination.