Onboard Air India One, June 29 (ANI): The Prime Minister, Dr. Manmohan Singh, on Monday said that the recently concluded Group of Twenty (G-20) Summit was in some ways, a preparatory exercise for the fifth summit to be held in November in Seoul, South Korea.
Interacting with media persons onboard Air India One while on his way back home, Dr. Singh said that the Toronto G-20 Summit had helped chart out the agenda and action points for the Seoul Summit.
When asked whether he felt that the Toronto Summit was again seen as a rich countries forum against the less richer ones, Dr. Singh said: "As far as our immediate concern with regard to the situation in the Eurozone, the situation of the banking system in Europe, and the fact that the recovery that has taken place in the last year is rather fragile, a need was felt for a calibrated attempt at fiscal consolidation rather than a one size fits all sort of action."
He further went on to reveal that this caveat, must be done in a growth-friendly manner and that his impression was that some of the European countries who came out with fiscal consolidation targets, were going about their business with due caution.
He said that the Toronto Summit has played a useful role in clarifying what is the scope for fiscal consolidation and in what manner the process of consolidation should be found.
As far as India was concerned, Dr. Singh said that its banking system remains "well-managed" and the economy was growing at a rate of 8.5 percent per annum.
"Our fiscal situation is a cause for concern, but when we compare the fiscal deficit of the GDP debt ration of the major developed countries, I think we come out much better," the Prime Minister said.
When asked whether through the Toronto G-20 communiqué, any country had been forced to go against its own national economic policy, Dr. Singh said: "We are dealing with the affairs of sovereign nations. There is, I think, a growing concern that the increasingly interdependent world in which we live in, there is a need for macro policy coordination to a much greater degree than has been feasible in the past. People have talked about macro-economic coordination and that fiscal coordination must take place in a manner that is growth -friendly."
"The IMF (International Monetary Fund) will come with its financial assessment of the financial imperatives of each of the 20 countries, and that would really be the time, think, people would be able to judge how far countries are willing to subordinate their sovereignty to the needs of managing an increasingly interdependent world," the Prime Minister further added.
On the issue of "Tobin" tax, Singh said admitted that there has been a lot of discussion on corporate governance, and he thought good corporate houses are looking at what they can do in non-traditional sectors vis-à-vis social services, education, health facilities for their employees.
He reiterated that this is a corporate responsibility, which "has to be shouldered by the corporate sector on its own."
"We are not contemplating any legislation in that area," he added.
Specifically referring to the "Tobin" tax, Dr. Singh said it has "merit in particular situations, but as far as India is concerned, we have not reached a stage where capital flows have become a problem.
"I think if capital inflows into our country, both by way of direct investment and by way of portfolio management, have been at reasonable levels. We don't face situations of the kind, which would require an imposition of the Tobin tax." By Ashok Dixit (ANI)