World economy needs more stimulus spending: PM

Bal Krishna
Toronto, Jun 26 (PTI) Indian Prime Minister Manmohan
Singh on Saturday said the fragile world economy needs more
stimulus spending and not cutbacks to ensure a sustained
recovery.
"The purpose of G-20 should be to ensure that the
momentum of recovery is sustained and enhanced in the years to
come," the Prime Minister told the Toronto Star in an
interview published, shortly before his arrival for the G-20
summit in Toronto over the weekend.
He said that the Group of 20 major and emerging
economies should not rein in budget deficits too fast but
coordinate policy to ensure a sustained economic recovery.
"But right now, the danger of deflation in the global
economy is, in my view, much greater than the danger of
inflation," the economist-Prime Minister said.
Wading into the hottest topic of the G-20 summit,
Singh said he sided with US President Barack Obama against
German Chancellor Angela Merkel and Britain's Prime Minister
David Cameron, who have both launched cutbacks and austerity
programmes to control mounting deficits and debts.
Without taking names, Singh made it clear where he
stands: "My own feeling is that early fiscal retrenchment
carries very considerable global risks" of jeopardising
worldwide economic recovery.
Singh complained of "Sikh extremism" in Canada, and
charged that Canadian Sikh extremists "have links to or are
themselves wedded to terrorism."
He will be raising the issue with Canadian Prime
Minister Stephen Harper on Sunday. Singh suggested that Canada
and other NATO members should not abandon Afghanistan next
year.
Doing so would "only embolden the radical forces
opposed to the emergence of a peaceful, pluralistic and
democratic Afghanistan."
He praised Canada's "well-governed economy," its
"exemplary" banking system and strong financial regulatory
regime.
That allowed Canada to escape the financial crisis
relatively unscathed, just like India. Both can now contribute
to the world economic recovery. PTI CORR
RBT


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