London: The Prime Minister Manmohan Singh has called upon world economies to continue with stimulus measures till 2010 and avoid all kinds of protectionism including in the financial sector to battle the global economic slowdown.
When asked about India’s stand on fiscal stimulus, Singh told the Financial Times in an interview: “I’ve seen a letter from the managing director of the IMF saying that the stimulus that has been planned in the year 2009 by major economies amounts to 2% of (world) GDP.
“This is probably adequate but it’s necessary to ensure that stimulus is sustained and maintained in the year 2010.”
Singh, who is here to attend the second summit meeting of the G-20 in about four months, said, “Protectionism has to be avoided - protectionism not only on the goods but also in the area of services. Financial protectionism is also bad and should be avoided.”
Singh said India’s fiscal stimulus for the time being is “adequate”. “With the decline of inflation there is added manoeuvrability in the use of monetary policy which will be utilized when and where it becomes necessary,” he added.
“We have taken measures. Our fiscal deficit has gone up substantially. We have deliberately allowed it to go up to provide stimulus as a substitute for the decline of exports ... ,” Singh said.