India’s Deft Economic Approach Pays Off During Global Crisis

Praise for India's goal of inclusive growth

Addressing advanced countries' public debt a priority

Strauss-Kahn tribute for transformed Fund

Strauss-Kahn noted that India’s rapid growth—which the IMF forecasts at 9.7 percent in 2010—has made it a driving force of the global economic recovery.

The IMF Managing Director was speaking during a trip to New Delhi, where he held talks with the Indian Prime Minister, Manmohan Singh, and the country’s finance minister, Pranab Mukherjee.

“We had cordial and useful discussions on a range of issues, including India’s impressive economic growth and steps that the Prime Minister has initiated on infrastructure and fiscal consolidation to further boost growth,” Strauss-Kahn said in a press release issued at the end of the trip.

“We also discussed the importance of international cooperation, particularly in the context of the G-20 process, to build and sustain a strong global recovery,” said Strauss-Kahn, adding that India was playing an important role in the Group of 20 leading economies.

Improving life for all

During the visit, the Managing Director also participated in a roundtable discussion organized by the Federation of Indian Chambers of Commerce and Industry (FICCI). In an address entitled “India and the global recovery”, Strauss-Kahn highlighted two features of India’s economic “success story,” which he said help important lessons for other countries.

One was the country’s significant technological advances which was buttressed by India’s commitment to excellence in higher education; the second, it’s focus on inclusive growth.

“In India, the goal is not simply for growth to be rapid, but for growth to also be inclusive—and improve the quality of life for all citizens,” he said.

The Managing Director was joined on the panel by Chief Economic Advisor Kaushik Basu, Nandan Nilekani, former CEO of Infosys and Chairman of Unique Identification Authority of India, and former Reserve Bank of India Governor Y.V.Reddy.

Priorities for securing global recovery

In his speech, Strauss-Kahn warned against any delay in addressing the outstanding problems highlighted by the global crisis.

“Public finances must be put on a sustainable footing, with credible medium-term consolidation plans. And financial sector repair and reform needs to move faster, so that financial institutions can support the recovery,” he said.

Public debt in advanced economies is projected to reach an average of 110 percent of GDP...