Haruhiko Kuroda, president of the Asian Development Bank is hopeful that Asian economies as a whole will post a growth rate of 6.6% this year compared to last year’s 4.5%. However, he warned the two major Southeast Asian economies of the chances of inflation ruining their good show.

“Asia has begun its emergence from the global downturn. As such, we believe this to be the opportune time to share experiences and determine ways to further strengthen the region in the months and years ahead,” Kuroda said during the forum “Impact of the Global Economic and Financial Crisis” organized in ADB headquarters in Manila.

The forum participants observed that policymakers of India and China need to devise methods to contain inflation. With the respective economies recovering, policy changes need to be implemented immediately to continue in the growth trajectory.

The report ‘Impact and Policy Responses – India’ acknowledged that India emerged unscathed from the global financial crisis. The stimulus packages, prompt initiatives, country’s stable domestic consumption and Indian bank’s restricted international exposure all helped the country to tide over the crisis. The economic crisis lasted only for a brief spell, also helped the government bail out the economy with fiscal stimulus.

However, inflation and fiscal deficit are two areas that should be addressed urgently by the country’s policymakers to prevent future jolts. As the developed countries have not yet displayed a sustained recovery from the economic crisis, the country’s future growth still remains uncertain and fragile. The report has suggested a number of ways to overcome this.

The Prime Minister, Mr. Manmohan Singh returned to Delhi on Saturday, December 19, after the 192-nation UN Summit over environmental concerns fell apart. The Summit was intended to discuss the future course of action, once the Kyoto Protocol of 1992 expires in 2012. The Protocol was adopted by 154 countries in the United Nations Framework on Climate Change in 1997, but the US kept away from it.

The Kyoto Protocol puts a legal binding on the developed nation for the reduction of 5.2% in the Green House Gases (GHG). However, the Copenhagen proposal made carbon reduction voluntary for the developed countries and binding for others for drastic reductions, a move the developing nations vehemently protested. Earlier, in a rare show of solidarity, India and China collectively walked out of the Summit, complaining about an inequitable proposal on Friday, December 18.

As the UN Summit ran the danger of a total collapse, a loosely structured Copenhagen Accord was formulated by the US and BASIC (Brazil, South Africa, India, and China) on the last day (December 19, 2009), proposing ‘voluntary’ action towards reducing carbon emissions. The Accord set out a commitment for limiting the rise in global temperature to 2 degree Celsius, but left out the details of the emission targets. The last day at the Summit witnessed a historical participation of 130 countries. The Accord, however, received sharp criticism with developing countries other than the BASIC nations, crying foul. The policy makers across the globe are now keeping a close watch on the developments, and whether or not the world reaches to a plenary agreement before 2012, remains to be seen.

According to the global market exchange rates, India is the 11th largest economy in the world. It is also the fourth biggest by purchasing power parity or PPP. After Independence, it was in the 1990s that saw the face of Indian economy shaping for a better future.

India has become the hub of international investment which is directly effecting the employment and labour market in the country. During the last few months, when the developed countries faced the hiccups of recession, the Indian employment market was still on a hiring spree. The financial year ending is expected to push more and more people for job changes and better opportunities.

The main reason of slow growth in the first few decades after Indian independence was due extensive regulation and extreme socio-democratic policies. Public ownership, undue protection, and resistant to change made sure that the bureaucracy did not let the international players and Indian private companies spread their operations within the country. However, since the scenario has changed now, GDP is increasing slowly but steadily to reduce the fiscal deficit of the country. At 10.4% , it is estimated to be among the top five in the world.