Mentioning that already Rs 60,000 crore liquidity has been infused into the financial system by RBI's measures and that Rs 91,500 crore liquidity adjustment facility exists, Chidambaram said the government, RBI and SEBI were watching the situation carefully and coordinating their actions.

TEXT OF FINANCE MINISTER P CHIDAMBARAM'S STATEMENT

This is a time of uncertainty. Yet, even in a time of uncertainty there are some facts that cannot be and ought not to be ignored.

The Indian economy continues to grow at a satisfactory rate. As recently as last week, the IMFs research department (Oliver Blanchard) noted that "the Indian economy would continue to do well despite the impact of the global liquidity crunch." As per projections made by the IMF, India is expected to post a GDP growth of 7.9 per cent during the current fiscal year.

The stock market indices are important indicators, but they are not the only indicators of the health of the Indian economy. The ratio of investment to GDP remains high at over 35 per cent at the end of the first quarter of 2008-09. The monsoon has been normal; the Kharif crop (especially rice and cotton) has been good; farmers are sowing their fields; and the prospects for the Rabi crop are bright. Factories continue to produce goods and the services sector is growing at a brisk rate.

Crude oil and commodity prices have declined sharply. This is expected to have a beneficial effect on inflation.

The root cause of the present uncertainty is liquidity and not any dramatic change in the fundamentals of the economy.

... contd.