India doesn't need IMF support, says PM

Developing countries will see the $1.1 trillion stimulus agreed by G20 leaders flowing to them to fight the worst economic crisis, but a resurgent India today said it does not need support from the IMF as it was sitting on healthy forex reserves.

“As fas as India is concerned, India has no intention of going to the IMF. (Forex) reserves are of $250 billion and we do not visualise that there is going to be a need in the near future to go to the IMF,” Prime Minister Manmohan Singh said at a press conference after the G20 Summit. Singh’s statement reflects the journey the Indian economy has covered since the beginning of reforms in the early 1990s, when the country was on the verge of defaulting on international obligations.

He said the developing countries deserved the stimulus, because although they are not responsible for this crisis, they are the biggest victims of it. “The present crisis does not originate in Asia or in Latin America. It originates at the heart of capitalism and it is been the laxity of regulation, so part of the blame must be shared by IMF,” the prime minister pointed out.

India itself has seen the crisis eating into its economic growth, which estimates suggest will dip to 7 per cent from the record 9 per cent and above for the last four years.

Singh said credit flow to developing countries had shrunk by $700 billion, exports had suffered and so had remittances.

On the flow of funds to developing countries, he said India stands to gain anyway since it does trade with several nations, which would be the beneficiaries of the multilateral agency’s improved financial strength.