Finance Minister pledges to check inflation

NEW DELHI, Sept 16 (PTI) — The Finance Minister, Mr Yashwant Sinha today asked the International Monetary Fund (IMF) and World Bank to put in place "an arrangement" urgently to protect developing countries like India from unscrupulous operations of indisciplined global operators that led to the Asian currency crisis.

India would make a forceful plea at next month’s IMF-World Bank meeting in Washington for reforming the international financial system to check operations of these unscrupulous financiers which militated the national interests of many emerging economies, Mr Sinha said.

The IMF and World Bank would have to help developing countries without actually imposing any conditionalities as there was no single international model for tackling such currency crises, he told the three-day Economic Editors Conference that commenced here today.

"No country in the world could allow its national interests to be trampled upon by unrestricted, unchecked and indisciplined international operators," he said, adding the world could no longer afford total lack of compassion throwing emerging economies at the mercy of market forces.

At the conference, attended by about 800 financial journalists from all over India, Mr Sinha spoke at length about government’s commitment to keep fiscal deficit within the budgeted level of 5.6 per cent and rein in inflation within a few months while hoping for a turnaround in the economy by year-end with recessionary trends reversed.

The annual conference, organised by the Press Information Bureau, offers financial journalists close interaction with union ministers and key officials on government policies.

India would continue its process of integrating with world economy despite dangers posed by these indisciplined financiers. The country remained a favourite destination for foreign investors as reform policies had remained virtually unchanged despite change in governments.

"India will not retreat into protectionism," he assured foreign investors and said they perceived India as a stable economy compared to financial turbulence in neighbouring South- East Asia.

The government’s main task now, he said was to restore investors confidence after a series of events like nuclear tests, U.S. sanctions and cutting of development assistance by developed countries.

Allaying fears about rising inflation, he said it was restricted to increase in prices of agricultural commodities and spared manufactured goods. Prices would come down once kharif crops arrived in the market, he said.

While promising to limit government borrowings within budgeted levels to keep fiscal deficit down, he expressed the confidence of buoyancy in revenue collections, particularly in direct taxes. Accruals from tax dispute settlement 'samadhan' scheme would be an added bonus.