'Govt has failed to check slowing economy'

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SME Times News Bureau | 26 Jun, 2012
The Bharatiya Janata Party (BJP) Monday criticised the moves of the finance ministry and the Reserve Bank of India (RBI) to boost the slowing economy, saying they had failed in their purpose.

"The government has failed...four steps announced by the RBI and the finance ministry to check a slowing economy resulted in the share markets coming down," BJP spokesperson Prakash Javadekar told reporters.

"This is a cosmetic exercise and indicates policy paralysis in the government."

Noting that the value of rupee went down by 30 percent since last year, Javadekar said people wanted some relief from the government.

The Reserve Bank of India announced a series of measures, including raising limits for external commercial borrowings and government securities, aimed at reviving the battered currency and the economy.

Amid volatile trade, the 30-scrip sensitive index (Sensex) of the Bombay Stock Exchange (BSE), which was in the green till late afternoon closed at 16,882.16 points, down 0.53 percent or 90.35 points from its previous close of 16,972.51 points.

In order to attract foreign funds, it hiked the FII limit for investment in government securities by USD 5 billion to USD 20 billion. However, investors felt this was not enough to boost the markets.

The Sensex had touched a high of 17,131.15 points and low of 16,853.05 points in intra-day trade.

On the global front, European shares fell as investors looked cautious ahead of a critical European Union summit later this week.

At the closing bell here, France's CAC was 1.68 percent down, while Germany's DAX and Britain's FTSE 100 were trading 1.66 percent and 0.77 percent lower respectively.