Prime Minister Manmohan Singh on Thursday warned that the G20 countries were not doing enough in the short term to revive the global economy. To ensure that the global GDP grows at least by two per cent in 2010 from an unavoidable decline of 1 per cent this year,all countries must spend more,preferably in a coordinated fashion. "What is currently planned for 2010 may be too little. It does seem that the risks lie in doing too little rather than too much,and we are not doing enough to ensure recovery in 2010," he told global leaders at the official dinner hosted by United Kingdom Prime Minster Gordon Brown on April 1. Singh,in fact,came out in strong defense of the trillion dollar bailouts of banks and financial institutions in the United States,Europe and Japan,despite public ire on the reprehensible behaviour on the part of managements of financial institutions. "However,it has to be explained to taxpayers that anger should not come in the way of efforts to resurrect the system," he said. India itself,he noted,had provided a fiscal stimulus of about four percentage points of its GDP or about Rs 1,20,000 crore in 2008-09. This will help the country's growth rate to less than seven per cent,still higher than most other economies. "We hope to be able to achieve a similar growth rate in 2009-10,with continuing reliance on monetary and fiscal policy. "Active contra-cyclical policy must be a priority item on our agenda and global markets are looking to see if we are united on this issue," he said,adding this was important for an economic revival and also to tackle unemployment. For these to be effective,however,credit flow must improve,and reviving the failed banks was necessary for the economy and employment. To help low-income countries,he asked the G20 to agree to increase the International Monetary Fund's resources by $500 billion over the next two years. The next quota review,originally scheduled for 2011 may be advanced to 2013. The G20 must also agree on a fresh allocation of special drawing rights of over $250 billion. This will provide the developing countries with about $80 billion of usable resources when liquidity is exceptionally tight.
