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Continue fiscal stimulus, PM tells world economies

Indian Prime Minister Manmohan Singh has urged the world economies to continue with stimulus packages till 2010 and avoid all kinds of protectionism including in the financial sector to battle the global economic slowdown.

business Updated: Apr 01, 2009 15:09 IST

Indian Prime Minister Manmohan Singh has urged the world economies to continue with stimulus packages till 2010 and avoid all kinds of protectionism including in the financial sector to battle the global economic slowdown.

When asked about India's stand on fiscal stimulus, Singh told the Financial Times in an interview: "I've seen a letter from the managing director of the IMF saying that the stimulus that has been planned in the year 2009 by major economies amounts to 2 per cent of (world) GDP.

"This is probably adequate but it's necessary to ensure that stimulus is sustained and maintained in the year 2010."

Singh, who is here to attend the second meeting of the leaders of the G-20 in about a month, said, "Protectionism has to be avoided -- protectionism not only on the goods but also in the area of services. Financial protectionism is also bad and should be avoided."

"Some action by the developed countries particularly the withdrawal of capital resources from the developing countries by the banks of the developed countries is equally worrisome.

"We have entirely agreed that protectionism of all sorts including financial protectionism has to be avoided. Although some countries have taken action, in practice the impact of what has been done has not been reversed," he added.