Amid India’s economic growth slipping in 2011-12 to a level below that recorded during the financial crisis of 2008-09 and no immediate revival in sight, the government on Saturday said G-20 nations did not respond as effectively to the Euro zone crisis as they did to the one in 2008-09.
“The way G-20 handled the crisis of 2008-09, taking measures to revive growth, was not evident this time," said a key official, even as Prime Minister Manmohan Singh on Saturday left to attend the G-20 meetings scheduled for June 18-19 in Mexico. The meeting would be held against the backdrop of the Euro zone struggling to keep its house in order.
When told India’s economic growth in 2011-12 had not only fallen below that in 2008-09, it was also the lowest in nine years, the official said not many countries had recorded economic growth higher than India’s. “In the room where G-20 leaders would talk, not many leaders could boast of recording economic growth higher than India,” the official said.
In 2011-12, India's economic growth fell to 6.5 per cent, while growth during the crisis period of 2008-09 stood at 6.7 per cent.
Officials said the Prime Minister had already asked advanced nations to spend more on infrastructure to revive demand and boost growth.
On US President Barack Obama calling up Manmohan Singh on Thursday to discuss economic issues just before G-20 meetings, officials said the two had exchanged ideas on economic issues the global economy currently faced. A White House readout had said the two leaders focused on measures to revive global growth. It added they had also discussed mutual issues.
Among the priorities highlighted by Mexico, the host for the G-20 meetings, was reviving global growth through structural reforms.
At the meetings, Prime Minister Singh would also meet other leaders of the BRIC (Brazil, Russia, India and China) nations. This would follow Standard & Poor’s (S&P) cautioning India might be the first of the BRIC countries to lose its investment-grade rating. When this was pointed to the officials, they rejected the assessment of the rating agency. “Fundamentals of the Indian economy are strong and its prospects robust,” said an official. He added talks between BRIC nations were independent of S&P's assessment.