New Delhi, Nov 21: The Bharatiya Janata Party (BJP) has said that India needs to restore economic confidence hit by the global credit crisis by helping struggling industries, boosting infrastructure spending and dramatically improving governance.

BJP''s senior leaders including leader in parliament Lal Krishna Advani held a meeting with industrialists to have a better understanding of the impact of the global crisis on the Indian economy.

During the meeting, Advani said that India was facing a serious economic crisis as it heads into elections in 2009.

BJP leader Yashwant Singh said the economy could take a hit if the government did not manage its finances properly.

"There appears to be either too much speculation and loss of confidence and we are not able to calm the market and if the losses in our financial reserves continues like this then it could lead to a grave crises," he added.

Industrialists said they were confident the economy would be able to weather the crisis if demand picked up.

"In my view I feel confident that the policies which will come out soon hopefully will address the concerns of the real estate and housing industry and once that demand goes up then the whole mood will change," said, K. P Singh chairman of DLF.

The one trillion dollars economy boomed in the past three years, growing at an annual rate of nine percent or more. But that boom, twinned with soaring commodity and energy prices, saw inflation spiral to nearly 13 percent in August.

The Reserve Bank of India (RBI) raised interest rates aggressively earlier in 2008 but has now had to drop them even more aggressively to counterbalance frozen money markets caused by the collapse of investment bank Lehman Brothers.

Now economists see growth at about seven percent this fiscal year as airlines, real estate and car-makers cut costs and output.

The BJP has accused the Congress party-led coalition for following irresponsible off-budget spending, populist schemes that did not boost productive capacity and heavy-handedness in tackling supply-side inflation by simply raising interest rates. (ANI)