Indian Prime Minister Manmohan Singh has said the Group of 20 major and emerging economies should not rein in budget deficits too fast but co-ordinate policy to ensure a sustained economic recovery. “My own feeling is that early fiscal retrenchment carries very considerable global risks,” Singh said at the G20 summit in Toronto.

“But right now, the danger of deflation in the global economy is, in my view, much greater than the danger of inflation,” Singh said. The manner of Europe’s handling of its debt problems would be “a major determinant of which way the world economy evolves,” he added
India has begun its own process of rolling back stimulus measures announced in the wake of the financial crisis.
It has outlined a roadmap to cut its deficit to 4.1% of GDP by end-March 2013, from a budgeted 5.5% in the current fiscal year to end-March 2011, helped by buoyant revenues from accelerating growth.
Asia’s third-largest economy is set to grow 8.5% in the current year, following a 7.4% expansion in the previous year.