The G-20 leaders at the ongoing summit in Mexico should refrain from coming out with ‘one-size-fits-all’ kind of a remedy for the global economy which is facing difficult times, Assocham President Rajkumar Dhoot said.
He said that while India is under pressure to go in for the fiscal consolidation and the government is taking austerity measures, it would need a solution suited to its own specific issues.
“Different economies of the world are grappling with different kinds of problem. One may argue that the governments in most parts of the world have little elbow room to step in with stimulus packages, but then there is a difference in the nature of the issues faced by them,” Dhoot said.
Citing India’s example, he said, the government needs to contain non-targeted oil subsidies and curb non-plan wasteful expenditure, but it must not compromise on the plan expenditure. “In fact, at a time when the private sector seems to be wary of fresh investments, it is the state sector which can give a stimulus to the economy, not necessarily by packages but by front-loading the Plan budget for the current fiscal,” said Dhoot.
He said the targets set by Prime Minister Manmohan Singh to execute infrastructure projects worth Rs 2 lakh crore for the current fiscal year, should be met rigorously. This is important because there is a little time for the country to repair the damage being done by the sentiments being further affected due to the outlook downgrades by Standard and Poor’s and Fitch rating agencies, he said. Under such circumstances, the chamber is confident that Prime Minister Manmohan Singh will press for a G-20 prescription, which leaves the ‘dosage administration’ to the individual country rather than a ‘uniform medicine’, Dhoot added.
On the eurozone crisis, he said that according to an internal survey done by Assocham: “The industry leaders in India remain concerned on the developments mainly on two counts—one, losing markets in Europe and the other is the currency fluctuations, playing havoc with the emerging economies.” He said that while the victory of the pro-bailout parties in the Greece elections came as a big relief to the world economies, including India, the problem seems to be far from over.