Prime Minister Manmohan Singh has urged the world economies to continue with stimulus packages till 2010 and avoid all kinds of protectionism, including in the financial sector, to battle the global economic slowdown.
Singh said India's fiscal stimulus for the time being is 'adequate'. "With the decline of inflation there is added manoeuvrability in the use of monetary policy which will be utilised when and where it becomes necessary," he added.
"Our growth rate has been affected; we were having a growth rate of 9 per cent until 2007/8, (from when) the growth rate has come down to 7 per cent and maybe lower than that," he said.
"We have taken measures. Our fiscal deficit has gone up substantially. We have deliberately allowed it to go up to provide stimulus as a substitute for the decline of exports, for the decline of international capital," Singh said.
Asked whether his coalition government was a constraint in bringing in more reforms, Singh said: "You would have liked to push through more reforms. The coalition has its own compulsions."
"It is certainly true that we would have liked to move faster on some elements on the (economic) reforms but politics is the art of the possible," he added.
Singh further said resolving the current global financial crisis needs a long time. "Beyond a point they are issues relating to the redistribution of powers among nations. I don't think these are issues that can be resolved in a short period of time," Singh said.
"If you look at (the) Bretton Woods, it took two years for the Americans and British to work out arrangements. There was the Keynes plan, the White plan and now the power system is much more complex, there are much more issues," he added.
"If you are talking about global reform it requires a lot more work. It is a task that should be entrusted to a competent group of people under the auspices of the IMF or another arrangement we are willing to look at," he said in the interview.
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