India proposes to push for a package deal at G-20 to reduce the sufferings

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of 34.5 million people who have been pushed below poverty line worldwide owing to financial turmoil that struck in September last year.

India will in all probability pilot a proposal on package for the ‘most vulnerable sections’ at Pittsburgh summit of Presidents and prime ministers from G-20 countries to be held on September 24-25.

The idea is to resist, albeit indirectly, US and European Union efforts to halt all economic stimulus packages with the contention that impact of financial markets turmoil has worn out. Other Indian partners in Bric — Brazil, China and Russia — would actively lobby for continuance of support to most vulnerable sections that have been denied minimum daily wages of $1.25 per day, a top finance ministry official told Financial Chronicle.

India will also push for rehabilitation of small and medium enterprises (SM­Es) worldwide that have been hit hard with reduced access to markets for products and services, talent and technology.

The twin proposals would be discussed at the meeting of sherpas from G-20 countries meeting in New York later this week. Deputy chairman of the planning commission, Montek Singh Ahluwalia, has already left for New York to take part in the conclave of sherpas.

At the G-20 finance ministers meeting held last week in London, both the US and EU attempted to push for ‘exit strategies’ translating into withdrawal of ‘high-cost’ economic stimulus packages. Bric finance ministers have reportedly opposed the move and it is quite likely that exit strategy will not be announced in the joint communiqué.

Developed countries have been clamouring for more funds from emerging economies like India and China to replenish resources of International Monetary Fund (IMF) to design stimulus packages to least developed countries worldwide.

On Monday, finance minister Pranab Mukherjee told reporters: “Majority of small countries that depend on the economic stimulus packages will probably collapse if stimulus packages are withdrawn or stopped immediately.”

Meanwhile, the government has finalised the method by which $10 billion will be provided to International Monetary Fund (IMF) that will design packages for countries and sections hit by the markets imbroglio.

A major chunk of contributions to IMF will be through purchase of over 10-year tenure notes regarded as ‘international reserves’. Gold reserves linked instruments would also be purchased from IMF against the credit offered to the multilateral funding agency.

A top finance ministry official confirmed that additional investment in IMF bonds was linked to India’s quota of special drawing rights (SDRs) and equity holding that at present stands at 1.8 per cent apart from voting rights New Delhi enjoys at the IMF.