India calls for G-20 cooperation for sustainable growth

India on Friday called upon fellow members of the Group of 20 countries to support a well-functioning international economy by coordination of their policy actions so as to ensure strong, sustainable and balanced growth.

Delivering his keynote address at a conference on 'International cooperation in times of global crisis: Views from G-20 countries' in New Delhi, finance minister Pranab Mukherjee pointed that the financial and economic crisis of 2007-9 had besides exposing the fragility of existing global financial and economic institutions also bared the limitations of the existing macro-economic policy tools. However, it had provided space for fresh perspectives on finance and globalisation, he said.

He reminded the G-20 countries that with the global economy in the process of a recovery and preparing for a post-crisis scenario, there were certain spheres in which immediate coordination in policy making would be essential. These are macroeconomic policies and exit strategies like pace of regulatory reforms to ensure financial stability, without affecting prospects of growth; reform in the governance of international financial institutions to reflect current economic realities; keeping international trade open and avoiding protectionism; and coordination on climate change and energy issues.

Stressing the need for coordinated policy actions, Mukherjee said: "While doing so, governments will have to build domestic political support for international policy coordination, wherein some national policies might have to be calibrated to ensure a more optimised global outcome."

Without naming any country, the finance minister expressed concern over the tendency for embracing protectionist policies. It may be recalled that the US recently hiked the fees for H-1B and L1 category visas which, it is feared, would adversely impact India's IT industry. Following the move, the State of Ohio banned outsourcing of IT contracts to foreign companies.

Pointing out that in the era of globalisation, with almost all countries integrated into the global economy, complete decoupling was only a myth, he said the current economic crisis, which started as a financial turmoil, had clearly indicated that no country was insulated and "it is turning out to be much deeper and broader than expected."