India may be ready to return to the path of fiscal consolidation from next April but Prime Minister Manmohan Singh will most likely push for continuation of the stimulus by developed countries at the Group of 20 Summit on the Financial Crisis and the World Economy in Pittsburgh.

At the summit — the third such in the last 12 months — the PM is likely to say that this is not the time to think of “exit” because developing countries will not be able to tap wider trade opportunities. “His key message will be that the world economy still requires large doses of stimulus,” a top government source said on board the PM’s aircraft.

Just ahead of his departure from New Delhi earlier today, Singh himself said: “The global economy and financial markets have shown a distinct improvement but we are still not out of the woods.” Drawing confidence from India’s growth in a year when most countries battled recession, he said: “Even though our growth rate has slowed to 6.7 per cent in 2008-09, we approach the summit with a sense of confidence.”

Though India has a lot at stake in a full revival of the world economy, Singh pointed out that its growth is primarily driven by domestic demand, a robust savings rate and a resilient external sector. “Capital flows, especially portfolio flows, have started picking up, and we remain an attractive investment destination,” he said. Indian stock markets have seen $10 billion in FII inflows this year alone.

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