<p>Pranab Mukherjee told Reuters Insider television a deepening debt crisis in Europe could hit India's and other emerging economies' exports and growth, but such a risk was not stopping India from gradually reversing loose fiscal and monetary policies. Asked whether uncertainty about the impact of Europe's debt crisis on the global economy was a reason to hold off with further interest rate increases despite last quarter's buoyant growth, Mukherjee said:"No, we won't pause them."<br /><br />The finance minister was speaking on the sidelines of a meeting of Group of 20 finance ministers and central bankers in the South Korean port city of Busan.India's central bank raised rates in March and April by 25 basis points and signalled more hikes would follow, when it last met for a regular quarterly policy review in April.<br /><br />However, recent market volatility and worries that Europe's efforts to rein in debt will sap global growth, cast doubt on the scope of monetary tightening by major central banks. Such worries also gave rise to suggestions that major emerging markets economies, such as China, India, Brazil and Russia, should help sustain global recovery by delaying the exit from loose policies put in place during the global downturn.<br /><br />Mukherjee, however, said that Asia's third-largest economy would continue to consolidate its finances and underscored the contrast between the relative fiscal health of emerging economies and debt-laden euro zone members."You need fiscal prudence and in the developing countries, we are doing so."<br /><br />Mukherjee said that India, which has pumped an equivalent of 3 percent of gross domestic product into its economy to shield it from the global crisis, planned to withdraw that stimulus next year.<br /><br />"I hope to have next year a total exit policy."<br /><br />The Indian economy grew by 8.6 percent in the March quarter from a year earlier in yet another sign that the world's major emerging economies have been little affected by Europe's troubles.<br /><br />However, Mukherjee said a deeper, protracted crisis would not leave those economies unscathed."If the larger Europe and the entire euro zone is affected by this crisis and the recovery process is slowed down, naturally it will affect both exports from the developing countries ... and the flow of FDI (foreign direct investment)," he said. "We do hope the crisis will be resolved sooner rather than later."<br /></p>
<p>Pranab Mukherjee told Reuters Insider television a deepening debt crisis in Europe could hit India's and other emerging economies' exports and growth, but such a risk was not stopping India from gradually reversing loose fiscal and monetary policies. Asked whether uncertainty about the impact of Europe's debt crisis on the global economy was a reason to hold off with further interest rate increases despite last quarter's buoyant growth, Mukherjee said:"No, we won't pause them."<br /><br />The finance minister was speaking on the sidelines of a meeting of Group of 20 finance ministers and central bankers in the South Korean port city of Busan.India's central bank raised rates in March and April by 25 basis points and signalled more hikes would follow, when it last met for a regular quarterly policy review in April.<br /><br />However, recent market volatility and worries that Europe's efforts to rein in debt will sap global growth, cast doubt on the scope of monetary tightening by major central banks. Such worries also gave rise to suggestions that major emerging markets economies, such as China, India, Brazil and Russia, should help sustain global recovery by delaying the exit from loose policies put in place during the global downturn.<br /><br />Mukherjee, however, said that Asia's third-largest economy would continue to consolidate its finances and underscored the contrast between the relative fiscal health of emerging economies and debt-laden euro zone members."You need fiscal prudence and in the developing countries, we are doing so."<br /><br />Mukherjee said that India, which has pumped an equivalent of 3 percent of gross domestic product into its economy to shield it from the global crisis, planned to withdraw that stimulus next year.<br /><br />"I hope to have next year a total exit policy."<br /><br />The Indian economy grew by 8.6 percent in the March quarter from a year earlier in yet another sign that the world's major emerging economies have been little affected by Europe's troubles.<br /><br />However, Mukherjee said a deeper, protracted crisis would not leave those economies unscathed."If the larger Europe and the entire euro zone is affected by this crisis and the recovery process is slowed down, naturally it will affect both exports from the developing countries ... and the flow of FDI (foreign direct investment)," he said. "We do hope the crisis will be resolved sooner rather than later."<br /></p>