India does not need to approach the International Monetary Fund or other multilateral institutions seeking funds, Deputy Chairman of the Planning Commission Montek Singh Ahluwalia said on Saturday.
“It is a categorical no. It (whether India needs to approach IMF or other multilateral institutions) is not on the agenda (at the G-20 summit). I do not think that the current economic situation requires it. I do not anticipate that in the near future at all. My personal view is that India does not need it either. The role of multilateral institutions vis-à-vis emerging countries will be discussed but it is not an India-specific issue,” Singh told newspersons before leaving for the G-20 Summit meeting.
The two-day G-20 Summit opens in St. Petersburg in Russia on September 5. Prime Minister Manmohan Singh will be leading the Indian delegation. Ahluwalia indicated that currency volatility will be an important part of the summit-level discussions.
The Deputy Chairman added that the leaders of Brazil, Russia, India, China and South Africa ( BRICS), who usually meet on the sidelines of the G-20 Summit, could give some indication on what the latest position is (on the possibility of a currency swap among these nations).
The Deputy Chairman was of the opinion that the Current Account Deficit (CAD) will be high in the first quarter as gold imports were high.
“The Finance Minister’s projection was that the CAD in the current year (2013-14) will be about 3.7 per cent of GDP. You will not see an improvement in CAD till the second quarter results. The Finance Minister is aware of all this and when he said 3.7 per cent he meant the year as a whole, I think that is possible because gold imports will be sharply curtailed,” Ahluwalia said.
Talking about the possibility of a cut in plan expenditure, Ahluwalia pointed out that though there was “no formal proposal, if the Finance Ministry seeks it, we will co-operate.”
There is speculation in the market that in order to provide extra subsidy for fuel on account on depreciation of the rupee and increase in crude oil prices, the Government may cut plan expenditure. This will help maintain the fiscal deficit at 4.8 per cent.