St. Petersburg (Russia): Attacking developed countries for unconventional monetary expansion and sudden moves for its reversal triggering currency volatility in countries like India, Prime Minister Manmohan Singh on Thursday asked the G-20 to show collective commitment for restoring robust growth in emerging markets.
He also called for extensive consultations within the G-20 grouping to tackle the current currency crisis.
Addressing the G-20 Summit here attended by the world's top leaders including US President Barack Obama and host Vladimir Putin, Singh declared that India has been affected by currency volatility in the past few weeks and was taking steps to finance the current account deficit (CAD) in an enviornment that is seen to be friendly for stable foreign capital flows.
The Prime Minister announced that India would continue to work within the framework of an open economy to restore growth to earlier levels.
"Our efforts at restoring growth will be greatly helped if we have a stable external environment that is supportive of growth.
"The G-20 has a major role to play in this context. This Summit must send a clear signal of our collective commitment to work together for the revival of growth, which is the only way of ensuring a sustainable growth in quality jobs.
"We must focus especially on the need to restore robust growth in the emerging market countries, which will also contribute to global recovery," he said.
Maintaining that India has undertaken a number of reforms and that it intends to do more in the future, Singh said the reforms that lie ahead were more difficult.
They relate to control of subsidies, reform of the tax system and reform of the financial sector.
"We are working on all these areas. The new Governor of the Reserve Bank of India has indicated important changes in banking regulations that will accelerate the reforms process," he said.
Referring to the current economic situation globally and in emerging markets, the Prime Minister said while the possibility of the negative effects of fiscal consolidation in the West was known, they were supposed to be offset by strong structural reforms in industrialised countries that would enhance productivity and private investment.
"This did not happen, or at least not as widely or at the pace that was expected," he said.
Singh said faced with persistent demand deficiency, industrialised countries relied heavily on unconventional monetary expansion on an unprecedented scale without an agreed policy coordination process. It had some success but also had spillover effects.