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India to focus on infrastructure-led growth at G20
Europe is one of India's major trade and investment
partners and "continuing problems there will further dampen global
markets and adversely impact our own economic growth", Singh said
as he left for an eight-day tour of Mexico and Brazil »
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Los Cabos (Mexico): If the current global economic
instability precipitates, India has far less ammunition now, than
in 2008, to contain its fallout, Indian interlocutors said ahead
of the G20 Summit here.
"The world is in deep trouble," Indian Prime Minister Manmohan
Singh told journalists, soon after landing at the San Jose del
Cabo International Airport via Frankfurt. "Hope the G20 fill come
up with constructive proposals to get the world out of the
crisis," he added.
"It is a more challenging crisis in many ways. I wouldn't say at
the moment it is more serious, since we don't know if it will be
managed or not," Planning Commission Deputy Chairman Montek Singh
Ahluwalia said.
"In the first crisis, there was enough fiscal room to respond.
There isn't enough fiscal room to respond now," he added,
comparing the situation in 2008, when the crisis started, with the
state of play now when it has threatened to resurface with far
more damaging implications.
"When there is a big global crisis, emerging markets are not left
unaffected," he said. According to him the main reason for India's
slowdown were the result of what was happening across the globe.
But he conceded that there were domestic problems as well that
needed to be addressed.
"We will be lucky this year if we are between 6.5 percent and 7
percent," he said on the growth rate he expected for the Indian
economy for the current fiscal.
Ahluwalia, who is Prime Minister Manmohan Singh's principal
interlocutor at the G20 Summit, said the outcome of the Greece
parliamentary elections - which could help the country stay in the
Eurozone and induce reforms - may calm the markets a little bit.
But the situation demanded much more and that there could not be
any short-term solutions. "My view is this slowdown cannot be
handled by a quick-fix, 'Lets speed up expenditure' kind of
balancing."
The plan panel deputy chair also did not see much of a problem on
account of the fact that India has a short-term debt of $137
billion that it has to repay, arguing such outflows will be met by
similar inflows. He also said the country also had enough reserves
to service the debt, adding that for an economy like India's,
which was growing at around 6-7 percent, bankers would only be
happy to lend money.
Manmohan Singh, who arrived in this Mexican resort town Sunday,
hoped that the G20 Summit would manage to find meaningful
solutions to how to arrest the current global economic turmoil and
restore growth.
He will start his engagements Monday with a meeting he is hosting
for the BRICS leaders -- Brazilian President Dilma Rousseff,
Russian President Vladimir Putin, Chinese Premier Wen Jiabao and
South African President Jacob Zuma.
(Arvind Padmanabhan can be reached at arvind.p@ians.in)
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