Putting up a brave front in the face of global meltdown, Prime Minister Manmohan Singh said that the government is watching the situation on a ‘day-to-day and hour-to-hour basis’ and asserted that there is no question of recession in India.

Replying to a volley of questions on the pressures on Indian economy due to international financial crisis, Singh said that though capital outflows were putting pressure on the liquidity and the rupee, Indian banking system was not affected as much as elsewhere.

"Economy will grow by 7.5-8 per cent this fiscal," he exuded confidence and debunked any fears of recession.

The Prime Minister said India's banking system ‘is not affected to the same degree as in the Western countries’.

However, the capital outflows from the country were exerting pressure on the liquidity and the exchange rate.

Singh said, the Reserve Bank has already taken steps to inject liquidity into the banking system.

"Today also the bank has reduced CRR by one per cent after earlier deduction of 0.5 per cent," he said.

The Prime Minister said the government would take appropriate steps to protect the economy which would grow by 7.5-8 per cent in 2008.