PM favours greater public investments to boost growth

Underlines the need for central banks carefully communicating policy actions to avoid volatility

Projecting over 8 per cent growth for India next year, Prime Minister Narendra Modi today said public investments need to be enhanced to stimulate growth and asked multilateral development banks to boost their capital to support infrastructure needs of developing countries.

He also underlined the need for central banks carefully communicating policy actions to avoid volatility.

Modi also voiced concern over multilateral lending agencies like the World bank imposing difficult safeguards and conditions on loans that become barriers to development.

"India's economic growth is likely to grow at 7.5 per cent this year and achieve a growth rate of 8 per cent plus next year. We have reduced inflation and current account and fiscal deficits," he said in his intervention at G20 working session on Inclusive Growth: Global Economy, Growth Strategies, Employment and Investment Strategies here.

The global economic growth, he said, remains weak, with slowdown in several major economies, volatile financial markets and competitive devaluation of currencies.

"To stimulate growth, we need to enhance public investments, not just rely on monetary policy," he said.

"G20's continued call to Central Banks for careful communication on monetary policy actions will be helpful in keeping financial and currency markets stable."

Modi said "multilateral Development Banks should enlarge their capital base to support infrastructure needs of the developing countries" while new institutions such as the New Development Bank are welcome additional sources of financing.

"There is global consensus on the need to address climate change. However, multilateral institutions should not impose such difficult safeguards and conditions on loans that they become barriers to development in many countries and undermine sustainable development," he said.

G20 efforts, the Prime Minister said, must be aligned with the UN Sustainable Development Goals, adopted this year, particularly with the number goal of elimination of all poverty by 2030.

"We welcome the G20 focus on employment of women and, on youth this year. Stable long term global economic growth requires not just capital flows, but also efforts to facilitate labour mobility and skill portability," he said.

India's programmes of inclusive development, including financial inclusion, universal access to basic needs by target year, Make in India, Skill India, Digital India, Industrial Corridors and Smart Cities will boost growth and employment, he said. "This will be a source of strength for the global economy.