India satisfied with G20 summit outcome
St Petersburg: India today expressed satisfaction that the G20 final declaration addressed its key concern by stating that the central banks of the developed world have agreed to "properly calibrate and communicate" their monetary policy to the developing economies to minimise volatility in capital flows and currencies.
Addressing the Indian media after the conclusion of the G-20 summit, Arvind Mayaram, Secretary, Department of Economic Affairs, also took comfort from the grouping's clear message that profits should be taxed where economic activities deriving the profits are performed and where value is created.
"This is an important landmark. This vindicates our own position in India as we have been trying to get MNCs to pay taxes due to India."
On the volatility issue, Mayaram said, "There will be now some comfort that we will have an idea of the road map adopted by the Central Banks of the developed economies", adding that as they withdraw the massive liquidity pumped by them globally at the height of the 2008 financial crisis.
In a reference to concerns about emerging markets about the tapering of stimulus programmes, the G20 leaders vowed that future changes to monetary policy settings will be "carefully calibrated and clearly communicated".
"We remain mindful of the risks and unintended negative side effects of extended periods of monetary easing," they said in the declaration.
The declaration has also accepted that there has been a spillover effect of massive monetary easing by the central banks of the developed world.
On the decision by Japan to substantially enhance its current forex swap arrangement with India from USD 15 billion to USD 50 billion, Mayaram said India will not need the enhanced Japanese swap funds anytime in the future.
"We are totally confident of funding our current account deficit this year which will be strictly kept under 3.7 per cent of GDP."
"The 50 billion USD Japanese swap arrangement however will serve the purpose of shoring up sentiment in the market.
Sometimes the market imagines reality to be worse than what exists on the ground. The swap arrangement will act as a comfort until the market fully accepts the actual reality," he said.
Mayaram also voiced satisfaction that the G20 leaders discussed other important issues relating to food security, financial inclusion, energy security as key elements of sustaining global growth with equity.
There was also emphasis on driving employment intensive investment in infrastructure sectors where the developed economies were urged to cooperate with long term funding of projects in the developing world. The role of SME sectors in generating higher employment was also stressed.