(a) whether any discussions were held in Washington and London summits of G-20 group of countries
to tackle global economic recession;
(b) if so, the details and the outcome thereof;
(c) the steps taken/being taken by the Government as a result thereof;
(d) whether the Government has any macro economic expectations from upcoming G-20 summit in St.
Petersburg; and
(e) if so, the details thereof?
THE MINISTER OF EXTERNAL AFFAIRS(SHRI S.M. KRISHNA)
(a) Yes.
(b) The Washington Summit held on November 15, 2008 outlined the root cause of the current
world financial and economic crisis, actions taken and to be taken and common principles for
reform of financial markets. The Summit outlined further work to be done in five areas:
(i) Strengthening transparency and accountability
(ii) Enhancing sound regulation
(iii) Promoting integrity in financial markets
(iv) Reinforcing international cooperation
(v) Reforming the International Financial Institutions
In the Washington Summit, a comprehensive action plan to implement the principles for reform was
laid down.The Leaders also made a commitment to an open global economy.
In the London Summit held on April 2, 2009, concrete measures to arrest and reverse the global
downturn were proposed. These included, inter alia, coordinating counter-cyclical policies (commitment of US$ 5 trillion fiscal expansion supported by accommodative monetary policies) for
restoring global growth; augmenting resources of International Financial Institutions (IMF, World
Bank and other Multilateral Development bodies) by an additional US$ 1.1 trillion for
kick-starting the global economy, meeting the balance of payment needs and providing social
support for countries in crisis; strengthening financial supervision and regulation (through a
framework of internationally agreed standards of financial regulation and supervision); and
establishing the new Financial Stability Board (FSB). The Summit agreed to develop an effective
early-warning system to spot build up of risks threatening global financial stability as well as
to extend regulation and oversight to all systemically important financial institutions,
instruments and markets.There was also agreement to take action against non-cooperative
jurisdictions including tax havens.The member countries reaffirmed commitment against
protectionist measures.
(c) India’s macro-economic policy response has been in consonance with the broad tenets of the
commitments made in G-20 Leaders meeting. Both the Government of India and the RBI have taken
adequate measures. The Government launched fiscal stimulus packages which came on top of an
already announced expanded safety-net programme for the rural poor, the farm loan waiver package
and payout following the Sixth Pay Commission report. RBI’s policy response has been to contain
the contagion from the global financial crisis while maintaining comfortable domestic and foreign
exchange liquidity. India is now a member of the newly expanded Financial Stability Board and has
been participating in its decisions for improving the regulatory and supervisory framework.
(d) & (e) Even though growth in many G-20 countries and other countries is still negative, (India being a notable exception), there are some signs of improvement in the global economy.The
forthcoming G-20 Summit in Pittsburg, USA, in September 2009 may address the issues of appropriate
exit strategies from the fiscal expansion; global imbalances that are linked to sustainable
recovery; and resumption of capital flows to developing countries.