While there may be no immediate tangible and meaningful benefits for India, the G-20 nations have acknowledged that excess volatility of financial flows and disorderly movements in exchange rates can have adverse implications for economic and financial stability, as observed recently in some emerging markets. While it was clear that monetary policies of central banks would be formulated and tailored in the interest of their respective countries and support their economic recovery, the G20 communique issued after the conclusion of the summit on Friday noted that it was important to remain mindful of the risks and unintended negative side effects of extended periods of monetary easing. “We recognize that strengthened and sustained growth will be accompanied by an eventual transition toward the normalization of monetary policies. Our central banks have committed that future changes to monetary policy settings will continue to be carefully calibrated and clearly communicated,” the communiqué noted.
India believes that information to this effect would help curb speculation in the markets. Speaking to newspersons Arvind Mayaram, secretary, department of economic affairs, said a roadmap on the changes in monetary policy would be immensely useful. “I believe this will help India,” Mayaram said.
The G-20 statement said countries would cooperate to ensure that policies implemented to support domestic growth also support global growth and financial stability and to manage their spillovers on other countries.
The communiqué issued after the conclusion of the deliberations , however, suggested that these nations need to pursue sound macroeconomic policies and roll out structural reforms that would help them cope with any added volatility. “Generally stronger policy frameworks in these countries allow them to better deal with these challenges,” the communiqué said adding that financial market conditions would be monitored carefully.
Mayaram said India reiterated its concern on Base erosion and profit shifting (BEPS) and found support from other countries who were also concerned about multinationals avoiding taxes. “This fully justifies our stand on taxation of multinationals,” he said. India’s position on enhancing infrastructure funding was also accepted.