Prime Minister Manmohan Singh today admitted that his government had limited options on the question of accelerating fiscal stimulus measures.
When asked if the G-20 declaration against any premature withdrawal of stimulus measures gave the Indian government some leeway, Singh said his options were limited. On fiscal policy, he said there was the fear of widening deficit and on the monetary policy front, the fear of a rise in inflation had reduced the central bank’s manoeuvrability on interest rates.
The prime minister addressed the media at the conclusion of the G-20 Summit here that endorsed many of the proposals put forward by the Indian government while keeping climate change negotiations outside its purview.
A cheerful Singh, who turned 77 on September 26, said there was no economic crisis in India. “Our exports and growth suffered, but the economy was now growing at 6.3 per cent.” The stock market, he said, was perhaps reflecting that confidence in the growth potential of the economy.
Apart from being cheerful, he was witty, too, in a few of his responses. On being asked if he was confident that the climate change negotiations would be concluded at Copenhagen in December, Singh said, “I am not an astrologer.” On the long and arduous G-20 consultation process, he said the forum was an essay in persuasion.
He dispelled fears that the growing influence of G-20 was not favourable to India. On the contrary, he said the emergence of G-20 was a clear sign that the world was becoming increasingly inter-dependent. G-8, he said, was ill-equipped to handle the complex global economy where emerging economies had begun playing a bigger role.
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The proposed peer review mechanism also would not create any problems because the International Monetary Fund was already reviewing India’s economic policies and programmes under the Fund’s Article IV provisions.
On trade, the prime minister said the US too was interested in early conclusion of the Doha round of multilateral trade negotiations. However, he admitted that he was worried about rising protectionism and the US was not excluded when the protectionism issue figured during discussion.
During the G-20 Summit, he did not have an opportunity to have a bilateral meeting with US President Barack Obama, as he was too preoccupied with the Summit as the host and, therefore, he did not have any bilateral meetings with any of the other G-20 leaders. Singh, however, had bilateral meetings with UK Prime Minister Gordon Brown and Japanese Prime Minister Yukio Hatoyama.
When he was greeted by a journalist on his completing 77 years, Singh said he was grateful to the people of India for giving him a chance to serve them again. This was bt he could not repay except by trying to serve the Indian people better, he said.
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Singh also said that he was concerned over the manner in which the US aid to Pakistan was being misused for building weapons that were targeted at India. The prime minister said Pakistan had to discard terror, carry out investigations into the terror establishments in that country, and take credible action to dismantle them.