India keen to start winding back financial stimulus

NEW DELHI - India may be among the first Group of 20 nations to begin winding back fiscal stimulus after Prime Minister Manmohan Singh said faster economic growth would allow the measures to be withdrawn.

"There are clear signs of an upturn in the economy," Singh told the India Economic Summit organised by the World Economic Forum in New Delhi. "Like other countries we resorted to a significant stimulus and we will take appropriate action next year to wind this down."

Singh's comments are at odds with policy makers from the United States, Japan, Australia and other Group of 20 nations who said at the weekend it's too early to withdraw fiscal steps designed to support global recovery. India's central bank last month began to tighten monetary policy amid concerns that an inflation flare-up may hit the pockets of close to 800 million Indians who live on less than US$2 a day.

"Demand in India has picked up and a continuation of stimulus may not be necessary next year," said Arun Duggal, chairman of Shriram Transport Finance, the nation's biggest financier of trucks and buses. "Stimulus should remain in developed countries as their economies are in a more fragile state and could tip backward."

Singh said India's economy may grow 6.5 per cent in the year ending March 31. He said with better rainfall from next

- BLOOMBERG