merisarkar news service
New Delhi, November 27, 2009
Indian government said on Friday that it is keeping a close eye on the financial crises in Dubai. The financial crisis is caused by debt repayment crisis of a state firm – Dubai World.
The government said that it would examine the scope of the problem but claimed that no impact is visible as of now.
Commerce Minister Anand Sharma has said that he does not think some development in real estate in Dubai will have an impact on the Indian economy.
Anand Sharma said that India is a very large and resilient economy. He said that as far as India is concerned, the housing, real estate sector and construction industry are all doing well. This is confirmed by the increasing demand for construction materials, cement and steel.
The Finance Secretary Ashok Chawla said that the issue will have to examined to see what is the problem, what will be the possible implication, if any for the Indian economy, the people and corporates.
Asked if the crisis will impact money flows into India, since the Gulf region accounts for over half the total inward remittances worth over 25 billion dollar annually from expatriate Indians, Mr Chawla said that this is unlikely.
The state-run Dubai World stunned the global financial world yesterday when it announced it needs to restructure its debt, estimated at 59 billion dollar to preempt default and asked creditors for a six-month deferment.
RBI Governor D Subbarao said the officers of the central Bank have been asked to study the impact and make necessary recommendations.