MoF drawing defensive plan if Greece exits eurozone

As Greece approaches another Parliamentary election there is a debate that a verdict in the favour of the parties opposing the bailout terms will lead to Greece eurozone exit is gaining momentum.

If Greece exits the euro zone, then it will have a far reaching impact on the global economy and countries like India too will feel the jitters. Aakansha Sethi of CNBC-TV18 reports that how the Indian government is planning to tackle the upcoming situation. The ministry of finance (MoF) is worried about the outcome of Greek vote on June 17 and hence the ministry has set up a taskforce which is examining various scenarios. The MoF feels that if Greek splinters from the euro zone then there will be a huge flight of capital from India to safer US securities and the rupee will further weaken. The MoF is working on a strategy that focuses on domestic investments as they are of the view that fiscal consolidation will become difficult and that will impact inflation. Ministry says that clarity will only come after euro zone summit on June 28. And by that time, presidential candidate will also be clear and hence that will bring clarity into the economic scenario for the country.  Also watch the accompanying video.