Pittsburgh: Prime Minister Manmohan Singh on Saturday said that there is no economic crisis in the country.
“There is no economic crisis in India. It is certainly true that as a sequel to the global economic crisis our exports have suffered that has affected the rate of growth, but even then our economy is growing at a rate of six and half percent. Therefore there is no crisis, as such in India,” Singh said.
However, the Prime Minister acknowledged that in a highly interdependent world, India has a stake in the stability and growth of the world economy.
“If world economy collapses, there is obviously some effect on our country. Already the rate of our growth of our economy particularly our exports have suffered,” he said, adding that this has led to decline in exports of important labour intensive products like gems and jewellery, leather goods textiles.
“So in an increasingly interdependent world, I think, no country by itself can ensure that all its goals of economic life can be achieved working to the exclusion of other participants in an increasingly interdependent world,” Singh said.
As such there is therefore a necessity for India to ensure that the global economic system continues to progress, he observed.
“We need an external environment which is conducive to the growth of our exports. We need an external environment which is conducive to an external flow of capital in an international environment which is conducive to increased growth of technology and all these things have a bearing on the rate of growth of our economy,” he said.
Noting that interdependence of nations is fact of life, the Prime Minister said interdependence in a globalized world means that no country how so ever powerful it may be can take on the entire burden of economic adjustment and economic decision making that may be required to manage the global system in an orderly passion.
“It is that perception, that reality which has, I think persuaded many people in Europe and the United States that G-8 is ill equipped to handle all the global issues with the rise of Asia. With growth of India, China, Brazil, economic decision-making has to take into account the view of these countries if it is to have an optimum impact,” he said.
Responding to a question, the Prime Minister said: “As of now, inflation is not a problem, it is under control, but our options are limited and constrained as we are by substantial amount of fiscal deficit and also at the monetary initiative.”