Jalan sees economic revival

He cautioned against blindly following ideologies in the pursuit of economic growth. "There is no universal model we can apply to proceed. Our social organisation and market structure are different. We have to rely on a policy that can keep the country moving," said Jalan.

According to the RBI governor, the recent economic crisis in the Asian region has taught countries the lesson of avoiding mismatches in assets and liabilities, managing cash flowseffectively and also optimum utilisation of assets.

Jalan attributed the stable conditions prevailing in the Indian financial sector to the sound economic fundamentals of the country. "Our forex reserves have risen substantially during the current year, the short-term loans are negligible and the external situation too is strong," Jalan said. “This has been possible due to the prudent decisions of the regulators,” he added.

"The slowness in opening up the system has deliberate action; the financial markets are orderly, and India can look forward to entering the new millennium with a higher rate of growth," said Jalan.

Exuding optimism, the RBI governor said that the world is less cynical about the fallout of the South-east Asian meltdown. "The developments in the last 2-3 weeks give room for optimism," he said. Jalan said that the over dependence on the manufacturing sector is changing and in its place, the value added services sector is gaining increasing importance. "This new revolution will be ledby information technology and will trigger off an industrial commerce and capital revolution," said Jalan.

Jalan pointed out that the recent currency meltdown has global dimensions which will require global actions to put things in order. "The difficulty that the south-east Asian region has gone through in the past should not be allowed to cloud future growth," said Jalan. He said that the affected countries would have to learn from mistakes that they have made.

"The next 50 years will provide opportunity for growth and value added services will determine which country grows Prudential Management in the Indian financial system has helped the markets despite the ups and downs, buffering it against the Asian contagion, he said.

"I believe… by and large, we can look forward to the new millennium with higher growth and a strong framework," he added.

With a good monsoon, India expected a six per cent growth rate though there has been a downturn of the industry. However, in the next six months thereshould be an upturn in the industry and India could look to the next millennium with a higher growth, the governor said.

Industrialist R P Goenka, who takes over as president of CACCI, in his welcome address, said it would be his endeavour to assist the affected countries and ensure that they would come out of the crisis.

Leading economists and presidents of 22 chambers of Asia Pacific Region are participating in the conference.