Putting the blame for India’s economic woes on its internal issues, German Finance Minister Wolfgang Schaeuble has said New Delhi should not attribute its problems to monetary polices of developed nations.
“I once again say that in India there are sufficient internal problems which are not caused due to the monetary policy of other countries,” Mr. Schaeuble told TV channel CNBC.
The comment came just before the G20 Ministerial meeting in Sydney, where finance ministers and central bank governors are scheduled to brainstorm on global concerns covering areas such as taxation and infrastructure funding to promote faster and evenly growth across the globe.
Emerging economies, including India, have been asking the US, which has started gradual withdrawal of its fiscal stimulus, to be more predictable in monetary policy. The US Federal tapering has caused flight of capital out of emerging economies and in turn hammering their currencies.
Mr. Schaeuble said further that “we must over strive towards an approach of solidarity... But everybody must understand that they first do their own homework and then countries can demand solidarity from others”.
He said there is always a temptation for everyone to take care of their own country and their own interest first.
“Therefore, this approach is never fully justified, nor is it particularly original,” he said, adding that developed countries too are at liberty to frame the monetary policy as adopted by India.
The US Fed first talked about tapering in May 2013, sending markets the world over into turmoil and the Indian rupee to a record low. Though the situation has improved much since then, the fears remain.
The Fed has reduced its monthly bond purchases by $ 20 billion to $ 65 billion on signs of an improving US economy.
The Reserve Bank of India Governor Raghuram Rajan had in January 2014 said the US should also think about the impact of its monetary policy on other economies.
Even International Monetary Fund chief Christine Lagarde had said emerging market economies like India should put in place sound fiscal and monetary policies to deal with the impact of US tapering, and cautioned advanced economies against fast withdrawal of stimulus.