India bound to feel the pain "sooner or later": P.M.

New Delhi, Oct 26 (PTI) After brainstorming with top world leaders in Beijing on the raging financial turmoil, Prime Minister Manmohan Singh has cautioned that India's economy was also bound to feel the pain "sooner or later" as "we are not in complete control."

"We are not in complete control. There are bigger
players and we are victims of that. The crisis is not of our
making," Singh said after participating at the 7th Asia-Europe
Meeting (A.S.E.M.) Summit in Beijing, attended by 45 leaders.

"Well, it all depends on how long it takes the world
community to restore confidence to the global financial
markets," the economist-turned-politician, whose speeches were
listened with rapt attention in Beijing, said.

Sooner or later, "the economy is bound to experience the
pain," Singh warned during an interaction with reporters on
board his special aircraft while returning home from his
two-nation tour of Japan and China.

Tracing the origin of the current global financial
crisis, Singh said it emerged in the U.S. and Europe.

Singh said that despite strong corrective measures
like injecting more liquidity and capitalising the banking
system, he was still "worried."

"The type of integrated world economy we live in we are
not immune and I had mentioned in Parliament earlier this week
on Monday and I repeated that same sentiment in Beijing (while
attending the A.S.E.M. summit)," Singh said.

However, the Prime Minister said his government has had
"a reasonably good term" in office till now.

"We have had a reasonably good term and I would not
deny that over the last few months inflation had become a
problem. Also, recently because of the global factors, the
financial crisis is having some effect on our economy.
Therefore, we are obliged to take corrective measures," Singh
said.

"To say that I am not worried would not be correct. It
is my duty as Prime Minister to worry when things don't go as
planned," he said.

The Prime Minister was asked whether he was concerned
about the economic crisis, months ahead of the general
elections.

Asked to comment on the view of the Left parties that
India has largely escaped the effects of the global financial
turmoil due to their policies, the Prime Minister said: "I am
afraid I don't agree."

"Strengthening India's banking system, strengthening
India's insurance system has enabled us to deal with the
crisis more effectively," he said. "I beg to differ. But I am
not very happy to part company with our Left colleagues."

"In my view India is faced with difficult problems, all
parties which are committed to secularism and nationalism must
work together to deal with communal and regional divide which
is being sought to be created by some anti-social elements,"
Singh said.

"There are issues which require all political parties
which think alike to sit together and I very much hope we can
find ways and means to work with our Left colleagues," Singh
said.

He said reforms cannot take place in political and
economic vacuum and his government was faced with problems.

"The situation has been such that oil prices shot up in
a manner that if I had passed on the whole burden to the
people at large, there would have been reckless inflation,"
Singh said, adding that would have been "far more
counter-productive than our position to pass on only a limited
amount of increase to the final consumer."

Looking at the economy from the traditional point of
view, he said "below the line fiscal deficit has increased,
but in a situation in which we are placed now, it is a
definite advantage. It is not a disadvantage."

"I think, we are in a typical Keynesian situation
where there is a lack of demand, private sector demand is very
weak, but strong government demand, both for social services
and for investments will provide the essential stabilisers
that our country needs in a time like this.

"We would have liked to do a lot more. But I think
politics is the art of possibilities," he said. PTI A.K.J.
RKM