FE quoted Mr C Rangarajan chairman of Prime Minister's Economic Advisory Council as saying that the uncertain market conditions globally may have some impact on India in terms of trade and capital flows if the growth rate of developed economies continued to remain low.

He said that "The growth rate in developed economies will remain slow and if it continues to remain at low level, it will have some impact upon India both in terms of trade and capital flows."

He, however, discounted the possibility of another round of recession as experienced during 2008-09 after the fall of Lehman Brothers. He said that "The possibilities of developed economies slipping into a recession are not that great. They will have a slower growth rate but recession means negative growth rate. I may not believe that is going to happen."

Elaborating, he said there was some concern on the future prospects of developed economies as the debt crisis in Europe still remained unresolved. There are also indications that American economy may also be weakened. He said that "All these have contributed towards a feeling that world economy is not moving as fast as originally envisaged."

The US is making efforts to revive the economy and it may take a month or so before the clouds get clear. He also said there was some panic regarding the direction in which advance economies would move and all these were contributing to a situation in which currencies are taking a beating.

(Sourced from www.financialexpress.com)