Eurozone contagion a major worry for India: Montek
Los Cabos: India's economic woes have not gone out of hand in the wake of the slip in the GDP growth -- the lowest in nearly 9 years -- but there could be trouble if the Eurozone crisis is not quickly contained and financial stability in Europe restored, a top Indian official said on Monday.
Ahead of the G-20 Summit of developed and developing countries being attended by Prime Minister Manmohan Singh among other world leaders, Deputy Chairman in the Planning Commission Montek Singh Ahluwalia said India will be "lucky" this year if it can achieve around seven percent growth rate this fiscal.
The country's economic growth rate slipped to 5.3 percent in the fourth quarter of 2011-12, lowest in nearly 9 years due to poor performance of the manufacturing and farm sectors.
Ways to fix the Eurozone crisis to prevent a contagion effect that could hurt the economies emerging economies like India and China is on the top of the agenda of the G-20 leaders who will be meeting in this Mexican coastal resort over the next two days.
Ahluwalia said the general assessment at the ongoing deliberations is that the global economy is "extremely weak" and it could sow the seeds for a second financial crisis in four years if the Eurozone crisis is not handled effectively.
"We have not reached a situation where there is a sudden outflow of funds. We don't need any support from IMF. We are not looking for anything like that," he said.
"We will be lucky to have six-and-a-half percent to seven percent growth which is lower than the long-term target," Ahluwalia, who is the sherpa assisting Prime Minister Singh at the summit, said. The G-20 accounts for 80 percent of the global GDP.
Ahluwalia said most countries have exhausted their "firepower" in tackling the faltering global economy and there is not that much fiscal room now.
"We are fortunate that we are not in a position that we will be looking at any kind of emergency assistance. We are not posing to G20 any specific thing that can be done for India. We are basically saying that most important thing that G-20 can do for India is to put in place a credible assurance for global financial security," he said.