FM meets experts to fine-tune stand at crisis summit

Finance Minister P Chidambaram today held discussions with regulators, policy-makers and economists to discuss the global financial turmoil and India’s stance at a meeting of at least 20 countries convened by the United States on November 15.

“The meeting was convened by the finance minister to discuss a number of issues, including the position that India must take at the forthcoming G-20 meeting,” Reserve Bank of India Governor D Subbarao told reporters after the meeting here.

Prime Minister Manmohan Singh, likely to lead the Indian delegation, may highlight India’s sound financial system which has stood it in good stead in the current crisis. In the past, developed nations have criticised India for not opening up its economy faster.

 

A participant at today’s meeting said the discussion saw a number of ideas being floated. “The crux was how to kick-start demand in Asia in the immediate term and the need for an international financial sector regulatory architecture over the long term,” he said.

One more round of discussions was expected next week to finalise India’s policy stance, he added. After that, Chidambaram is expected to discuss with the prime minister a set of proposals that emerge from these consultations.

The G-20 is a group of 20 major developing countries led by India, China, Brazil and South Africa and was formed in 2003 to protect the economic interests of developing countries. The global financial turmoil owes its origin to sub-prime mortgage crisis in the United States and has now spread to other developed and developing countries.

“The summit is a high-level meeting that will discuss possible changes in international financial architecture,” said C Rangarajan, former RBI governor and till recently the chairman of the Prime Minister’s Economic Advisory Council.

Besides Subbarao and Rangarajan, today’s meeting was attended by Finance Secretary Arun Ramanathan, Department of Economic Affairs Secretary Ashok Chawla, Sebi Chairman CB Bhave, RBI Deputy Governor Rakesh Mohan, former central bank governor Bimal Jalan, Planning Commission Deputy Chairman Montek Singh Ahluwalia and economist Rajiv Kumar.

An expert who attended today’s meeting said the general feeling was that India was better off than others and the crisis was more concentrated in the international markets. The position of Indian banks was much better than their global counterparts, he added.

The government, the RBI and market regulator Sebi have taken a number of measures to improve liquidity and encourage fund inflows from overseas.