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Vajpayee says economy not mismanaged

India's economy, which has been in the grips of a slowdown, had not been mismanaged but a degree of complacency had probably crept in, Prime Minister Atal Bihari Vajpayee has said.

"Vajpayee believes the economic situation is a cause for grave concern but it is by no means out of control," the Indian Express said after an interview with the prime minister.

Vajpayee said in the interview, published on Monday, that there had been a feeling that all was well with the economy.

"There is nothing particularly to worry about," Vajpayee said, referring to the perception.

This was probably why the recent crisis in the country's stock markets went unnoticed.

Earlier this year, a run on the country's largest mutual fund, Unit Trust of India, unearthed a financial sector scandal, and media and opposition alleged the prime minister's office had influenced some decisions which caused losses to the mutual fund.

Vajpayee has refuted the allegations and offered to hold a parliamentary probe.

Worries that foreign fund inflows were slowing put pressure on Indian markets on Friday, driving the rupee to a lifetime low and the key share index to a near five-month bottom.

"I think there was also a degree of inexperience," the paper quoted Vajpayee as saying in reference to the handling of the stock market crisis. He said somebody should have kept a closer eye on the markets.

Vajpayee said it was not good enough if his finance ministry claimed it did not know what was going on.

The Indian economy was experiencing a slowdown, with exports down and revenues and industrial growth slowing.

The country registered a gross domestic product growth of 5.2 per cent in 2000-01 (April-March), down from 6.4 per cent in the previous year.

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