Greece crisis may have only short-term impact: Montek

The Hindu, May 19, 2010

Planning Commission Deputy Chairman Montek Singh Ahluwalia on Tuesday maintained that the ongoing debt crisis in Greece may lead to India witnessing a short-term impact only if the problem spreads to larger economies in the Eurozone.

Speaking at a function organised by CUTS International here, Mr Ahluwalia pointed out India was not in the same predicament that some of the small countries in Eurozone finds themselves in. Besides, he felt that the sovereign debt crisis would remain confined to the small countries and not spread globally. “If it [Greece bailout package] succeeds in stabilising the global financial situation, that is beneficial for us. The crisis really is the crisis of sovereign debt in the industrialised countries….We are not in that situation…But if it is limited to two or three relatively small countries, it does not make any difference on our economy,” he said.

Be that as it may, the Greek debt crisis as also its bailout package have resulted in extreme volatility in global markets for the past couple of weeks and the Indian bourses have been impacted as well.

Regulatory reforms

Turning to the draft regulatory reform bill prepared by the Planning Commission, Mr Ahluwalia said the purpose of the draft was to bring in uniformity in various approaches to regulatory reforms in the country. “The approach to regulation in India is ad hoc…The issue of accountability to the consumers is extremely important. Civil society could play an important role in ensuring that regulatory capture does not take place, which will handicap the independence of regulatory commissions,” he said.

In this regard, Mr Ahluwalia asked CUTS to prepare a statement to approach regulatory coherence in the country.

Earlier, in his presentation on the bill, Advisor to the Deputy Chairman Gajendra Haldea stressed that the draft was being put in the public domain for eliciting views on the nature and extent of legislative action necessary for reforming the regulation of the country’s key infrastructure sectors.

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