Prime Minister: We have had a very fruitful G20 meeting. Much of the G20 is work in progress. But as I have said in my opening remarks, we have achieved quite a lot in two years since its inception. The Seoul meeting has delivered the following concrete
things:
First, completion of the second stage of IMF quota reforms and re-structuring of the executive board of the fund, with new and more flexible credit lines.
Two, BASEL III, a key pillar of the global financial reforms. Much more remains to be done by the financial stability board which has now been democratised to include all G20 members.
Three, agreement on the macroeconomic mutual assessment process to be reviewed in the next G20 meeting. This is a complex process but it is the first step towards country led policy coordination.
Fourth, putting development on the agenda of the G20. A high level panel has been mandated to look at ways of financing infrastructure development in developing countries using private, public and semi public means. In addition, there was a discussion on the
prospects for the Doha round of trade negotiations, and also the prospects for the Cancun Summit on environment related issues. So on the whole , the meeting did yield positive results, and as far as what I said my speech at the meeting is already made available
to you. So I believe you have seen it.
Question: Financial sector development council, do you approve of such a measure and do you see India playing an interlocutory role in G20 between surplus and deficit countries?
Prime Minister: No there is no such possibility. Our reforms are well thought of. They were in response to the needs of the time. And our requirements will be the sole determinant of what type of reforms we wish to do. But we do want, I think, a reformed
system, which is internationally accepted because that is the way in which an interdependent world can manage flows of capital from one country to the other.
We have a trade deficit of about 7-8% of our GDP. We have a current account deficit of about 2.5 to 3% of our GDP. We are not piling up reserves. So we are not creating any problems for the functioning of the global system. We are not a surplus country in that
sense, we have a deficit, but our deficit will and has been managed within the limits of prudence.
Question: What do you envisage as the counters of the new financial order in the world? Will it supplement IMF?
Prime Minister: It is too early to speculate on the final shape of the new financial order. As I said, much of it is work in progress. I think, several ideas are under discussion. A dialogue is taking place at different forums. It is very difficult
for me to predict where they will all go.
Question: On capital flows, China and Germany have taken on US. Can we afford to be sanguine about it, given the inflationary risks.
Prime Minister: Well, capital flows can create problems but we are not in that stage where capital flows can become a major problem. We will manage our affairs in such a manner that capital flows do not give rise to the type of inflationary problems
that you have referred.
Question: Most of what you said in your speech at the plenary seems to have been included in the G20 final communiqué. Is it the victory of Dr. Manhoman Singh, that you influenced the final communiqué?
Prime Minister: Well I do not claim victory. These are ideas which are under discussion in various fora. The Sherpas have been discussing these ideas and it is a process of give and take. But I do claim some credit that in my speech, I brought the
development issue into the very forefront of sustainable, manageable growth process, that you should not only look at mainly surpluses and deficits but you should also see that these imbalances become an opportunity to deal with a more fundamental imbalance
which is the development gap between the rich and poor countries. And that point, after I made that in my opening speech, was caught up by several other speakers and they complimented that I focussed and brought development to the forefront of the international
dialogue.
Question: Regarding the CAG report on the scandal in the 2G spectrum allocation of role of Minister Raja?
Prime Minister: Parliament is in session. It is not proper for me to comment on a subject which is also probably in the court.
Question: BASEL III issue.. there were some concerns whether India even needs to adopt it, do we need to rush into it?
Prime Minister: Well there is no question of rushing into it. If I remember it correctly, even the BASEL draft has to be adopted by the year 2018-19. So I think there is a fair amount of time available for us to decide what to do on our own.
Question: Proposal to recycle surpluses for infrastructure development…is there a need to limiting inflows into infrastructure in developed countries?
Prime MInister: Infrastructure in one critical bottleneck which is hampering the development of large number of developing countries, both in Asia, Africa and Latin America. And you have a queer situation, in a more rational world, capital should flow
from rich countries to poor countries. Here capital is flowing from developing countries to rich countries and there is I think some oddity in this whole process. What I was saying was that these imbalances should be invitations to bring about a new order,
where surplus capital would become available to poor countries to accelerate the process of their development. If it comes about, I think then it would greatly accelerate the process of growth of poorer countries.
Question: In your speech you said there would be fiscal consolidation, does India plan to further stay on the fiscal stimulus path?
Prime Minister: I think, we have now moved to a stage that we cautiously are working toward financial consolidation. Monetary policy measures have been taken by the Reserve Bank and gradually, our fiscal system will also move in the direction of consolidation.
Question: Sir, G20 ka jo safar shuru hua hai, wo Toronto se lekar How would you describe the journey of the G20 so far..from Toronto to Seoul?
Prime Minister: Jaisa maine abhi aapko bataya, teen char jo vishaya maine zikra kiye jin pe progress hua hai.. IMF quota reforms…new facilities in the IMF and the development issue brought explicitly on the agenda of the Group of 20, then the mutual
adjustment process of determining what the surplus countries should do, what deficit countries should do. That is the process which has got the approval of the Group but it is a complicated process. It will require lot of effort to work out operational rules
of the game for working of the mutual assessment process.
Question: How have the developed countries responded to your speech today?
Prime Minister: The very fact that development has been explicitly put on the agenda of the Group of 20, there is progress.
Question: Investment in infrastructure…. there are so many delays in projects…
Prime Minister: Well, these are our internal concerns. We have to ensure that projects, good projects come on the agenda for consideration, that project management is satisfactory, that people find these investments in these projects worthwhile,.
All that the money from abroad can do is, if a country is well managed, if it has projects which are well designed, if it has a domestic policy framework which is attractive enough for investors, then money will become available. It does not mean that money
will flow freely regardless of what we do with the money.
Question: You shared a close relationship with President Bush and you seem to have struck personal chemistry with President Obama as well…how would you describe…
Prime Minister: Well I have answered that question several times before. I think President Bush, when the first time I met him, he introduced me to his wife and said, " Laura, do you know of any other country of 1.2 billion people committed to democracy,
committed to respect for fundamental human freedom, committed to the rule of law and yet doing well in terms of the development agenda.” So it was India's attractiveness, India is a unique country, that with all our diversity, with all the complexities of
caste, of religion, that we remain a functioning democracy, that we can manage to grow at 8-9% growth rate. So it is really a tribute to India that attracted George Bush and same thing I find in President Obama. His speech to our Parliament, his idea of India
that he talked about in his speeches, is a reflection of the uniqueness of India as a functioning democracy, committed to the rule of law, committed to respect for fundamental human freedoms and yet managing to grow at a respectable rate. So this is a tribute
to India and not a tribute to me. What I am is because what India has made me.
Question: Aaj aapne speech jo G20 mein kahi, wo sabne endorse ki aapko bahut badhai.. kya bharat ke common aadmi ki life mein behtar change aane waala hai?What would be the benefits to the common man in India out of this G20 exercise?
Prime Minister: Bharat mein jo development honi chahiye, jitni tezi se hamaye aage badhna chahiye, uske liye haemin androoni taur pe bahut kuch karma hoga, saath saath hamare liye international environment aisa hona chahiye, jisme trade flows should
be encouraged, where capital can flow in, where technology transfer is easy and therefore India has a stake in the functioning of the international economic system. G20 is charged with the responsibility to deal with the imbalances that have now crippled the
international financial system. India has a vested interest that the international financial system should be restructured, it should be well managed because that would mean accelerated growth in our country, that would mean our ability to create jobs for
our people will improve.
Question: What is your view of the valuation of the Chinese currency?
Prime Minister: Well, Chinese have the surplus which is I think, no body can deny, but the relation between surplus countries and deficit countries is not a technical issue. If you go back to the Bretton Woods debate, there was at that very time,
there was a Keynes plan, there was a White Plan, and Keynes was of the view that surplus countries have as much responsibility to take adjustment measures as the deficit countries, but the international financial mechanism is essentially a power mechanism,
and the way the international financial system functions, so far creditors countries have always been able to have their way. Now, G20 wants to have a more balanced system, where both surplus and deficit countries would have to take corrective action. But
what that corrective action should be, I think, that will be something which will emerge out of this MAP process that has got the approval of G20.
Question: You had meetings with UK and Mexico leadership in which, we learnt you felt that it is difficult to have consensus of what ails the global economy…
Prime Minister: Quite frankly, it will take a long time before I think, people agree upon the diagnosis for this malaise. I think some point to the Chinese, the Chinese say the real problems are in the United States because of easy money, loose money
and if you ask the Americans, they will say that it is because some surplus countries are keeping their exchange rates deliberately undervalued. Now this is a situation which required corrective action, but who should take these corrective actions, surplus
countries or deficit countries. This will emerge only if the MAP process is allowed to take shape.
Question: Do you feel that after the G20 Summit, the tension between China and US on their exchange rate issue has reduced?
Prime Minister: I think US & China have very intimate economic relations. I don't see, for example, the exchange rates controversy will affect very substantially, I think, the development of relations. Certainly the economic relations between China and
the United States cannot , I think…be…(inaudible).. I do not think that their relationship will suffer.
Question: Sir, I am not asking any subjudice of what is in Parliament, your own colleague, Jayalalalitha has offered to Congress the support of 18 MPs, if Raja is removed?
Prime Minister: This is a subject which I am hearing for the first time. This is for the Congress high command, I think to take note of. I don't know what Dr. Jayalalitha has said. We are in alliance with the DMK and that alliance stands as of now.
On board special flight from Seoul to New Delhi
November 12, 2010