EU debt crisis, US slowdown impacting India: Pranab

New Delhi:Debt crisis in Europe andslowdown in the US are having an adverse impact on India, butthe fundamentals of the country's economy remain intact,Finance Minister Pranab Mukherjee said today.

Addressing the National Development Council (NDC) meetinghere, he said "while there may be some moderation in growth inthe current fiscal, the fundamentals of the economy are intactand the medium-term growth prospects remain buoyant".

However, Mukherjee said as the country has becomeincreasingly globalised, it means that "when the worldsneezes, India runs risk of catching a cold"."Not surprisingly, the economic crisis in Europe and theslowdown in the US are impacting us adversely".

Indian economy, which recorded a growth rate of 8.5 percent in 2010-11, is expected to moderate to about 8 percentduring the current fiscal. In the April-June period of 2011-12the growth slipped to 7.7 percent, slowest in six quarters.

More from Economy

Mukherjee further said that unlike in 2008-09, thegovernment doesn't have an elbow room for economic stimulus asit committed towards fiscal consolidation.

In the Budget 2011-12 the government has envisaged afiscal consolidation path and aims to bring down fiscaldeficit to 4.6 percent of GDP in the current fiscal.

"As Finance Minister, I stand committed to this path offiscal consolidation," Mukherjee said adding, "the quality ofexpenditure and its multiplier effect on growth must get ourattention".

The Prime Minister, senior central cabinet ministers andmost of the chief ministers are attending the NDC meet, whichis considering the blueprint or Approach Paper for the 12thFive Year Plan (2012-17).