India to drive growth: FM

He told the policy-setting body of the IMF that his government was committed to a determined continuation of reforms, but with a human face, involving emphasis on health, education and employment. ‘‘The key to growth, the government believes, is enhanced investment — public and private, domestic and foreign.’’

Despite a delayed monsoon and oil price pressures, the economy was expected to grow in the range of 6.5 to 7 per cent this year, he said.

‘‘The external position has added to overall confidence and the country’s credit standing has improved in international markets. Fiscal consolidation (reduction of Budget deficits) remains high on the agenda, and the government has demonstrated its commitment by notifying the Fiscal Responsibility and Budget Management Act (FRBM) and the detailed rules for its implementation in July this year,’’ he said.

Further liberalisation of the external sector has been announced, and the government would promote multilateral trade liberalisation policies in the spirit of the Doha round, he said.

Noting that the current outlook for oil prices made the macroeconomic management in India very complex, he said, ‘‘monetary policy will continue to emphasise price stability with growth.’’

An enduring solution to these problems, he said, was the strengthening of cooperation between the oil importing and exporting countries to stabilise the market and for international financial institutions to stand ready to support countries vulnerable to potential shocks.

Special attention has been drawn to the reverse capital flows from emerging markets to mature markets.

On reverse capital flows from emerging markets to mature markets, he said, ‘‘we appreciate the recognition of ‘self-insurance’ role of reserves build up and its implicatons for global growth. We would like to reiterate that this is also a sign of weakness in the international financial architecture in providing any viable collective insurance to otherwise well-managed economies”.

The international community needed to recognise and accept the increasing role of the emerging market economies in sustaining the present phase of recovery, and accordingly evolve an appropriate approach towards adjustment to the changing environment, the FM said.

— PTI