‘India can’t expect outside help on economy’
NEW DELHI, June 24: As G20 countries worked on steps to tackle black money, Prime Minister Manmohan Singh has said it is a problem but no “magic solutions” were available to deal with menace.
“The problem is there but there are no magic solutions available. I think it is going to be a slow process,” Singh told reporters accompanying him on his return home after his eight-day foreign tour.
The Prime Minister’s remark came when he was asked whether the black money issue has become irrelevant for the Group of Developed and Developing countries(G-20) or any improvement was there in dealing with the problem.
“It is too early to say one way or the other,” he said.
The just concluded G20 Summit at Los Cabos in Mexico welcomed the efforts to enhance interagency cooperation to tackle illicit financial flows.
In its communique, the G20 said it supported the renewal of the Financial Action Task Force (FATF) mandate, thereby sustaining global efforts to combat money laundering.
In the tax area, the G20 leaders including Prime Minister Singh reiterated their commitment to strengthen transparency and comprehensive exchange of information.
The 14-page document also called on relevant stakeholders to play an active role in fighting corruption, saying graft impeded economic growth, threatened the integrity of markets, undermined fair competition and undermined the rule of law.
Global Financial Integrity (GFI), a US NGO, praised G20 leaders today for prominently focusing on the issue of illicit financial flows and committing to move toward the automatic exchange of tax information.
G20 leaders have committed “to lead by example in implementing” the practice of automatic tax information exchange, and called upon other “countries to join this growing practice as appropriate,” a move lauded by GFI as a major step in the right direction.
Corruption, crime, and tax evasion in the form of illicit financial outflows cost the developing world US$1 trillion per year, according to GFI research.
“We are thrilled to see the G20 commit to adopting a standardized system of automatic tax information exchange,” said GFI Director Raymond Baker. “Automatic information exchange will go a long way towards curtailing tax evasion.”
As Government prepares to unveil some measures to revive the economy, Singh says India cannot expect “outside help” on a scale which can see the country through its difficulties.
“We have to raise our economy through our own good steps,” Singh said.
Fresh from attending the G20 Summit in Mexico and the Rio+20 Summit in Brazil, Singh said the events of the last couple of days convinced him more than ever before that there are no international solutions to the problems of a country of India’s size.
“We must plan our economy in such a manner that we cannot expect outside help on a scale which can see us through our difficulties,” he said.
The Government is likely to announce some measures tomorrow to shore up confidence in the financial markets and revive the economy before Finance Minister Pranab Mukherjee demits office to contest the Presidential elections as the UPA nominee.
Singh promised that problems with regard to the fiscal management will be tackled effectively and credibly.
“There are problems with regard to management of the balance of payments deficit on the current account. Those problems also we will tackle.
It will not be proper for me to talk about these things in detail, but, you have my assurance that I recognise that we have to work our way to restore the momentum of growth that India needs and which the people of India want the Government of India to work for,” he said.
Prime Minister Singh says that India will have to work harder than ever before in restoring fiscal balance.
“We have to work systematically to ensure that the balance of payment problem is managed properly and the climate for foreign investment, both direct and portfolio is also favourably motivated.
“We owe it to our country to take all the necessary decisions which would return the country to a high growth path. There are problems with regard to the fiscal management. We will tackle that problem effectively and credibly.
Noting that India was a semi federal polity, Singh said cooperative federalism made it incumbent on all political parties, those ruling at the Centre and those ruling in States, to work together to find credible ways and means to get this country moving again on to the high growth path which it had achieved until 2011-12.
Singh also said a lot of things which are not going right, they have their origins outside India. At the same time, he admitted that there have been problems in our own country.
“The 2008 financial crisis affected our growth rate. Our growth rate fell from 9 per cent to 6.7 per cent and we recovered in next 2 years but then came the Euro zone crisis and therefore there is a flight of capital from large number of developing countries,” he said.
“Capital in search of safety wants to go to Germany, wants to go to the United States and therefore all developing countries, including China, are experiencing a deceleration of growth rates,” he added. (PTI)
Follow our WhatsApp channel