Thaindian News

By Arvind Padmanabhan
Pittsburgh, Sep 26 (IANS) While he persuaded the G20 leaders not to bring an abrupt halt to their stimulus packages to revive their and the global economy, Prime Minister Manmohan Singh said there was little scope for another such package in India.

“Our specific circumstances have to respond to our domestic situation. It is certainly true that we have limited space and therefore accelerating the scope of stimulus is rather limited,” the prime minister told a press conference here.

He said the constraint mainly was the high fiscal deficit of the government because of the large spending programme announced by the government over the past year to pump prime the economy.

Yet, the prime minister maintained that there were other options as well but outside the government.

“The monetary policy has some scope. But that would also get affected if inflation really becomes a problem,” he added, while explaining what the Reserve Bank of India can do on the subject.

He was, however, quick to add that inflation was not a problem as of now and prices were under control.

At the summit, the G20 leaders agreed that the time was not yet ripe to end the stimulus, in line with the Indian government’s stand, since the process of recovery and reform of the global economy and the financial system was not yet over.

“We pledge today to sustain our strong policy response until a durable recovery is secured. We will act to ensure that when growth returns, jobs do too. We will avoid any premature withdrawal of stimulus,” their statement said.