Price stability key to recovery for India, other G20 nations

G20-PRICES

V S Chandrasekar
Toronto, Jun 28 (PTI) Amid concerns over sustaining the
recovery through domestic consumption, the world's most
influential leaders have asked their grouping, G-20, to work
for price stability - a key challenge for India grappling with
double digit inflation.
"Monetary policy will continue to be appropriate to
achieve price stability and thereby contribute to the
recovery," the declaration by G-20 leaders said on Sunday
after their two-day summit here.
India is battling high overall inflation which touched
10.16 in May, while food inflation is above 16 per cent. The
government's chief economic adviser himself estimated that
last week's decision to raise fuel prices would stoke
inflation by 0.9 percentage points.
The Reserve Bank of India is scheduled to review monetary
policy on July 27 amid expectations of rise in key policy
interest rates.
Though India, as Prime Minister Manmohan Singh said, is
on the way to returning to nine per cent economic growth,
sustaining it with strong demand would require a fine
balancing act.
"The path of adjustment must be carefully calibrated to
sustain the recovery in private demand," the declaration said.
Sustaining private demand amid stress on government
finances in several European countries remains a major
challenge for the global economy. PTI VSC
MRD


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