India to seek new balance, joint action, at G20 meet

India is likely to a coordinated action on reviving global growth, as well as finding a new balance to deal with some of the contentious issues at the meeting of G20 leaders that starts in Seoul on Thursday.

An indication of Prime Minister Manmohan Singh’s vision came during yesterday’s joint press conference with US President Barack Obama. “The world needs a new balance between deficit countries and surplus countries and that (means) paying more attention to the development potential, including infrastructure development (in emerging economies),” Singh had said.

Deputy Chairman Planning Commission Montek Singh Ahluwalia, who is Singh’s Sherpa, and senior officials from the finance ministry have already left for Seoul for preparatory talks.

The issues that India is expected to highlight at the G20 meet include enhanced expenditure on infrastructure by developed economies, stable capital flows to the developing markets, energetic macroeconomic adjustments and speeding financial sector reforms.

One of India’s major concerns is the issue of large capital flows that it has to contend with due to quantitative easing being done in some of the advanced economies.

Global leaders are also worried about the capital surpluses due to high savings, export earnings in countries such as China and deficit countries like the US whose debt is heavily subscribed by China, raising the risk of asset bubbles in the US.