According to Reserve Bank, Indian economy is likely to recover from the impact of the financial meltdown later this year as stability gets restored in world markets.
Mr D Subbarao Reserve Bank Governor said at a financial management summit in Mumbai that "As the monetary and fiscal steps takes way through, and the calm restored in the global markets, we can see an economic turnaround later this year."
Mr Subbarao said India's less dependence on merchandise exports and its smooth functioning financial system, comfortable FOREX reserves and modest inflation will help for a swift recovery from the slow down.
He said cautioning the policy makers about challenges in the domestic economy to manage the recovery, the unwinding of measures taken during crisis time will be less painful for India than in other countries.
He added that “While risks from global markets persist, there are challenges in the domestic market (as to) how we manage the recovery in the next 6 to 9 months." The central bank was confident of achieving a 6% real GDP growth in 2009-10 as it had projected earlier.
Mr Subbarao further added that if global factors favor an early recovery in the domestic market and the already taken stimulus measures yield results, then it could lessen the need for further stimulus measures.