The Toronto Summit deliberated on 26-27 June and concluded, issuing a communiqu that papered over sharp differences among the Group of 20 nations on vital policy issues, committed itself to continue developing coordination on regulation and macro-economic policy among the major economies, and set a deadline of early November for International Monetary Fund (IMF) members to complete ratifying the changes in its capital structure to grant developing countries greater voting powers and enhance the Fund's lending capacity.

Not that there was any specific decision, but, failing to find any solution or any set of solutions, the Group allowed each member to adopt its own differentiated and tailored policies on a range of topics, which were high on the Forum's agenda in its bid to re-balance global growth. This has enabled each Member to individually take a call, almost on all issues from stabilizing debt burdens of governments to make banks more resilient.

However, there were sharp differences on two issues within the Group i.e. the pace at which countries would exit stimulus and taxing banks to generate resources for the future bailout. Thus on all matters that were on the table, the Summit avoided making any mandatory prescriptions, leaving member-countries to follow their own counsel, while observing some principles of prudence. It was, however, agreed that Members would deliver on their existing stimulus plans, and halve fiscal deficit by 2013 or stabilize or reduce their debt-GDP ration by 2016. They further agreed that they would communicate their deficit reduction plans now to reassure debt markets that have, of late, caused anxious moments over possible sovereign default in the Euro zone.

However, the Toronto Summit clearly voted for growth for the short term, over austerity. Having failed to reconcile their differences, the leaders deferred decisions on most crucial issues to the Seoul Summit in November. Further, the International Monetary Fund (IMF)'s ongoing assessment of the financial imperatives of the G-20 countries would provide more clarity on how far each of them is wiling to subordinate their national sovereignty to the needs of managing an increasingly inter-dependent world. IMF has indeed put forth some categories of countries, which, because of their structural similarities, could take similar approaches in tackling macro-economic problems, but it is, however, too early to predict the outcome of the process.

Interacting with the media at Air Force One, the PM's special aircraft, Prime Minister ManMohan Singh, riding on the confidence boost that he received by having outperformed everybody else by withdrawing fuel subsidies at home, even before the mandate was given by G-20 meet and as a leader of one of the fastest growing economies in the word, was quite articulate on what has been made out as achievement of G-20 and its general direction now onwards. He said the Toronto meeting was in some ways the preparation for Seoul meeting in November this year. I think the (Toronto) Summit has helped in charting out the agenda and action points for the Seoul Summit. He added that immediate concern of G-20 was the situation in the Euro zone, especially the condition of some of the European banks' balance sheets. He said there was an agreement among the leaders that global economic recovery over the last year was rather fragile.

On the question whether there was any major headway in the Toronto Summit when it comes to re-balancing and strengthening the global growth, he said, What is needed is calibrated attempt at fiscal consolidation, rather than a one-size-fits-all sort of action. In that way, there was progress. He said growth is the immediate need. Even those countries which want to go ahead with fiscal consolidation reckon that they must do it in a growth-friendly manner. Even those European countries which came out with targets for fiscal consolidation were proceeding with due caution. He said, So, the Summit had played a useful role in clarifying that the scope of fiscal consolidation should be found.

India Outperforms by Withdrawing Fuel Subsidies even before G-20 Mandate

However, while decisions by G-20 do not impose any obligations on any country, yet an affirmation in the Toronto Summit declaration that the Group would encourage continued and full implementation of country-specific strategies to phase out inefficient fossil fuel subsidies in the medium term is perhaps the only G-20 mandate on India's policy makers. This was followed by India not only in principle but in practice too, which is why that India, on its own volition withdrew subsidies across the board on fossil fuels, even if probably the timing of withdrawal of subsidies was not at all opportune. I personally see no other reason as to why and where was the urgency, in fact, haste, in abrupt announcement of withdrawal of subsidy on all petroleum products, including kerosene, which has directly hit the poorest section of Indian society, politically called, AAM AADMI. This was especially painful for everybody when the inflation, specially food inflation was at high two-digit level. Politically, it may have earned India a few brownie points at international gathering, but it did successfully provoke the entire opposition within the country to register their loudest protest, credited and believed to be the biggest ever since the political movement started by Jai Prakash Narain, which challenged the might of Indira Gandhi, forcing her out of office.