PM to meet corporate honchos tomorrow amid global eco woes

New Delhi, Mar 27 (PTI) Prime Minister Manmohan Singh is
likely to discuss the impact of global demand contraction on
Indian economy with industry leaders here Saturday, ahead of
the G-20 summit in London next week.

Those invited for the interaction with the Prime Minister
include Tata group head Ratan Tata, Reliance Industries
Chairman Mukesh Ambani and Reliance-ADAG group Chairman Anil
Ambani, Wipro Chairman Asim Premji, Bharat Forge's CMD Baba
Kalyani and presidents of FICCI, CII and Assocham.

The corporate honchos are expected to give key inputs to
Singh for the summit of world's most influential developed and
developing countries, to be held on April 2. The Prime
Minister would be leaving for the summit on March 31.

High cost of finance and inadequate liquidity remain
critical issues for the industry. Business leaders feel the
Indian economy faces the paradox of near-zero inflation but
high interest rates.

One of the problems, they say, lie with a high level of
government borrowings which would be sucking out liquidity
from the system, keeping pressure on interest rates.

The government will borrow an additional Rs 1,40,000
crore during the first half of next fiscal to fund its
increasing public expenditure.

The gross borrowings would be Rs 2,41,000 crore, Economic
Affairs Secretary Ashok Chawla said yesterday after his
meeting with Reserve Bank Governor D Subbarao.

As for stimulating the domestic demand, the government is
constrained by the Election Commission's Code of Conduct in
the run-up to general elections in implementing projects
involving expenditure from the exchequer.

The industry, on the other hand, has been pressing for
continuation of the government schemes, as announced in the
interim budget last month. PTI PC
HMK
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