India's Response to Be 'Tailored' to Shield Growth

April 6 (Bloomberg) -- India's central bank said its policy response will be "tailored" to arrest a steeper-than-estimated moderation in economic growth.

The global recession will lead to exports slowing and inflows of foreign funds shrinking, resulting in a widening of the current-account deficit, Reserve Bank of India Governor Duvvuri Subbarao said in Mumbai today.

Prime Minister Manmohan Singh's government has cut taxes on consumer goods and services to help companies fight slowing demand and minimize job cuts. Subbarao, who has lowered interest rates five times since October, said policy makers have done "everything" to protect the economy from the global slump.

Declining overseas orders and shrinking local demand caused growth to slow for a third straight quarter in the three months to Dec. 31, when the $1.2 trillion economy expanded 5.3 percent from a year earlier.

India's economic recovery will be sharper than that of the rest of the world, Subbarao said.

To contact the reporter on this story: Kartik Goyal in New Delhi at goyal@bloomberg.net .