Press Release No. 12/95

Press Release: IMF Managing Director Visits India, Meets Prime Minister Manmohan Singh and Participates in India-China Conference India

March 20, 2012

Ms. Christine Lagarde, Managing Director of the International Monetary Fund (IMF), made the following statement today in New Delhi at the conclusion of her two-day visit to India:

“It always is a great pleasure to return to India—and this is my first visit as Managing Director of the IMF. I was privileged to meet with Prime Minister Manmohan Singh. I also had productive discussions with Finance Minister Pranab Mukherjee, Minister of Commerce and Industry Anand Sharma, Deputy Planning Commission Chairman Montek Singh Ahluwalia, Unique Identification Authority Chairman Nandan Nilekani, and other senior officials.

“There is no doubt that India has established itself as a leader on the international economic stage, and has navigated the global financial crisis well. Strong economic policies and prudent supervision of the financial sector have allowed the government to limit the direct impact of the crisis on the economy and the financial system.

“In my meetings with the authorities, we exchanged views on a range of issues, particularly the unsettled global outlook, which has added to India’s domestic policy challenges. Our discussions focused on how to build investment in India and facilitate growth. In that context, the IMF supports the steps that the authorities have announced in the 2012/13 Budget to continue on the fiscal consolidation path and to increase allocations for capital and social spending, which will support stronger and more inclusive growth. We welcome the initiatives to scale up the use of the Aadhaar—India’s Unique Identification system —which should ensure maximum impact of government money on the lives of people who need it most. Commitments to continue with tax reforms and streamline spending over the medium term are also welcome.

“As the government has indicated, India intends to build the momentum for reform. Indeed, we welcome the substantial decline in poverty in recent years, which demonstrates the benefits of policies also focused on more inclusive growth.

“We discussed the importance of international cooperation to build and sustain a strong global recovery, and the collective effort as supported by the G20 in Cannes to strengthen the Fund’s resources. Emerging economies are a key part of the solution to the global problems. I conveyed to Prime Minister Singh our appreciation of India’s role as an important voice to the world on behalf of the interests of emerging and developing economies. We welcome that India has approved its participation in the IMF’s 2010 Quota and Governance reforms, and we encourage all other members to help complete the process expeditiously.

“I also had an interesting exchange of perspectives with senior representatives from the private sector and civil society, including on issues such as India’s entrepreneurial spirit, how to raise productivity, and sustain the country’s high growth potential.

“I participated in a round table discussion at an IMF-sponsored conference, China and India—Sustaining High Quality Growth, which brought together distinguished speakers from several countries. It is clear that the rise of Asia in the global economy is a defining development. This conference provided an important opportunity to discuss key policy issues, and highlight what has worked and what more needs to be done to ensure sustained rapid and inclusive economic growth. The discussions held at this conference will provide important insights for other emerging and developing economies as well.

“Finally, I would like to express my great appreciation to the government and people of India for the hospitality they have extended to me during this visit. On behalf of the IMF, I look forward to our continued collaboration.”