New Delhi: India has called for a coordinated withdrawal of US stimulus to protect the emerging market economies from the global volatility. Speaking at the G20 deputies meeting in Melbourne, finance secretary Arvind Mayaram said, “Emerging markets are going through a phase of tepid economic activity, with some of the major emerging economies seeing significant negative output gaps. The reasons for the slowdown have been partly structural and exacerbated by external environment especially increased volatility with unwinding of unconventional monetary policies.”
Though the normalisation of unconventional monetary policy in the US has been largely smooth, he said that low volatility in the markets should not lead to complacency. “Backstop measure should continue to be reinforced and unwinding should be pursued with close co-ordination among the member Central Banks minimising negative spillovers, as committed by G20 leaders,” he said. He also pointed that the civil war in Iraq has created uncertainties with an overhang on the global economy.
“The volatility in petroleum prices have put pressure on the fisc in countries like India,” said Mr Mayaram said. The Indian finance secretary also assured the global community that policies of the new government will deepen the reform process, and finance minister Arun Jaitley will announce reform measures in the forthcoming budget” in July.
“We will be strengthening our growth strategies as per priorities of the new government. I am confident that this will be growth oriented and would deepen the reform process to put the economy on a high growth path which is in line with the G20 objective of strong, sustainable and balanced growth,” said the secretary.
