Prime Minister Manmohan Singh on Sunday said the United Progressive Alliance (UPA) government had anticipated an economic slowdown months ago and that people should judge its performance on the basis of swift action taken in tackling the crisis.
"I don't take credit, but I think Finance Minister, Mr (P.) Chidambaram and I had anticipated, I think, that there is likely to be a global slowdown this year," the prime minister said on his way back from Washington.
“I think we have done reasonably well and I sincerely hope that the people of India would repose their confidence in us.”
The prime minister said having anticipated the slowdown, his government took “excessive risk” in the national budget for this year in terms of deficits, which eventually helped in tackling the liquidity problems that subsequently emerged.
“So as far as our economy is concerned, I think, our fiscal stimulus is already on,” he told journalists on his way back from Washington after attending the G20 Summit on financial markets and the world economy hosted by US President George W. Bush.
It was this reason, he said, farmers were given record prices for their wheat and rice produce, banks were told to write off agriculture debt worth Rs.71,000 crores (Rs.710 billion) and the government hiked the outlay for social services programmes.
“So whatever is needed to keep the economy on an even keel will be done. And fortunately inflation is now becoming less of a problem,” he said, adding: “That will give us greater maneuverability to deal with the economic situation.”
The prime minister also maintained that there was no move to alter the elections schedule and that people should judge his government on the basis of the fact that while the rest of the world was in "doom and gloom", India continued to maintain its 7.5 percent growth rate.
"Elections will be held on schedule," a relaxed Manmohan Singh said, when asked if the financial crisis would have an impact on when the UPA government, which took office May 22, 2004, intended to hold the next elections.
"It (the crisis) has no bearing on the elections,” he said, reflecting once again his stand on more than one occasion that the general elections would be held when they fall due - that is by spring of 2009.
"I think, as I said, the crisis is not our making. What I would like is for the people of India to judge us by the response of our government to this crisis," said the prime minister in response to the question.
"We acted in time, and while the rest of the world is in doom and gloom, we will still maintain a growth rate of 7.5 percent.
"Growth with stability, more socially inclusive growth is a reality and will remain a reality despite the onslaught of the adverse turn in our external environment,” hr said.
The prime minister said he had no idea as to when the current global financial crisis will be fully tackled and that his government's efforts would continue to be to minimise its impact on the Indian economy.
“I am not an astrologer. I think there are apprehensions that we haven't seen the worst of the crisis. So, there are conflicting viewpoints,” he said, adding: “But how long will it take? I am afraid, I cannot pronounce with any sense of authority.”
The prime minister said the invitation to India and several other developing countries to the Summit for dialogue was an indication that global leaders had finally realised that the balance of power was shifting to emerging economies like India.
"This is for the first time there was a sincere dialogue between the major developed countries and the major emerging economies," the prime minister said.
“We were previously also, for the last couple of years, being invited to the G8 meetings, but consultations were merely for the sake of form. Our views were not really taken into account, while they were formulating their viewpoints.”
At the conclusion of the Summit, the G20 leaders issued a statement, promising to take all steps necessary to stabilize the financial system, and noted five common principles on fixing the financial system.
The statement included an agreement to meet again by April 30 next year by when their host President Bush would have handed the charge of the world's largest economy to president-elect Barack Obama.
Earlier, seeking a global response to the financial crisis, Manmohan Singh called for a multi-pronged response to arrest the deepening recession and avoid another one in future.
"Since the crisis is global, it calls for a co-ordinated global response and this summit is therefore, timely," he said.
The summit brought together leaders from Group of Seven industrial nations, a dozen emerging markets like India, China, Brazil and South Africa and the European Union. These 20 together account for 90 per cent of global economy.