The Economic Advisory Council to the Prime Minister (EAC) again revised Gross Domestic Product (GDP) projections for the current financial year. The EAC said that ongoing financial crisis would impact Indian economy in a long run. However, it ruled out possibility of any financial recession in country due to its strong economic fundamentals.

The Economic Advisory Council projected 7.1 per cent growth rate of economy instead of earlier forecast of 7.7 per cent. Recently, EAC chairman, Suresh Tendulkar and other EAC members released the report titled "Review of the economy 2008-09".

Mr. Tendulkar said, "The economy is facing a crisis of confidence among consumers, investors and bankers. But these concerns or crisis are not justified by the circumstances of the Indian economy which is still growing at a reasonable rate."

The country witnessed growth rate of 6.5 per cent in the second half of 2008. Almost all economic segments reported decline in demand in domestic and international market under the impact of global slowdown.

Mr. Tendulkar added, "The slowdown has been caused by painful adjustments to abrupt changes in international economy -steeply rising inflationary pressures emanating from spiraling commodity prices in the first half of the fiscal followed by financial meltdown and deeper than anticipated recession in the advanced industrial countries in the second half".

The council also forecasted that economic deficit would remain 1.9 per cent of the GDP in 2008-09. It asked banks to be more liberal to advance credits and funds to business world.