India wants that though there is nothing wrong in the coordinated action to exit from the fiscal stimulus to tackle the crisis, the response to the crisis varies from country to country and it will be prudent to allow the countries to decide on their exact timing of exit. For instance, India feels that when growth, unemployment and inflation are so markedly different in countries, there cannot be any simultaneous exit. And since the issue of inflation is a major worry for it, India will decide the timing after assessing the implications on its economy. The same should be applicable to the BRIC group since the responsibility of the crisis primarily rests with the developed countries, especially the USA.

As regards the strengthening of the global financial position, India's stand is that the post crisis economic weight should be considered while deciding on the new quotas for the IMF.India has emphasised that the heads and senior leadership of the international financial institutions should be appointed through an open , transparent and meritbased selection process. At the next Spring meetings of the IMF and the World Bank, India will certainly press for bringing about this change in the top management of the international financial institutions by giving weight to the representatives of the BRIC countries whose economies have performed much better in the post-crisis period and who will steer the growth process in the global economy in the coming years.

India will strongly make the point that the developed countries, especially the US have become more protectionist in the crisis period tough officially their representatives are taking a liberal position. The London Summit in April this year said in its declaration that “ we will minimise any negative impact on trade and investment of our domestic policy actions including fiscal policy and action in support of the financial sector. We will not retreat into financial protectionism, particularly measures that constrain worldwide capital flows, especially to the developing countries”. In practice this has not been followed and Indian officials will mention specific cases where the trade barriers not permitted under WTO, are continuing to the detriment of the developing countries.

As regards the reforms of the financial markets, India's record is impeccable in terms of maintaining prudence in regulatory management. The London declaration wanted that the G-20 countries will strengthen financial market transparency by enhancing required disclosure on complex financial products and ensuring complete and accurate disclosure by firms of their financial conditions. Incentives should be aligned to avoid excessive risk taking. Indian Government officials feel that the US financial agencies and the banks may again resort to profit-hungry risk-taking ventures creating fresh problems for the financial system as a whole and there is every reason for the US Government to be very strict on such offenders. Already, the US financial sector is thinking of going back to their old practices which led to the latest crisis.

On reforming of international financial institutions, Indian position is that emerging and the developing countries including the poorest countries should have greater voice and representation and the Financial Stability Forum must expand to include more representatives from the emerging economies. India will coordinate its actions with Russia, Brazil and China so that the emerging economies can bargain as a group and the developed countries give due recognition to the role they have been playing in ensuring stability in the global economy which was shattered by the greedy policies of the US financial sector.Since India and China will be playing a key role in the new century, there will be more interaction between Indian and Chinese officials in working on a joint strategy for the international financial institutions.

As a follow-up of the global financial crisis, there has been a perceptible change in the econmies of the emerging developing countries as also the western nations. While in the west, even after the recession is over, the growth rate will remain sluggish, in the emerging economies, the growth rate will accelerate and that will add to the total economic weight of the developing countries in the next decade of global economy. A recent international study has shown that the US's economic weight has been steadily falling since the year 2000 when it was 32 per cent of the total global weight. In 2007, it came down to 25 per cent and this falling trend will continue with the share of the BRIC countries going up steadily.

This emerging global economy pattern will determine the future trade and investment relations as also the role of different countries in the international financial institutions. India has already made it clear to the developed countries that this change in the economic weight and the increasing role of the emerging economies in steering the growth process of the world economy, have to be taken into account in deciding on the future management and the quota of the international financial institutions. This time, the emerging economies, especially China, India, Brazil and Russia, the BRIC group will be able to assert better in the Pittsburgh summit in influencing the global financial and monetary policies.(IPA Service)