Lack of regulation and inadequacy of financial institutions such as the IMF and the World Bank are the main causes of the global financial downturn and these issues should be discussed at the forthcoming G-20 meet in London, Finance Minister Pranab Mukherjee said today."The root cause of the financial crisis is the lack of regulation and inadequacy of financial institutions such as the IMF and the World Bank," he told reporters in Guwahati.
"These issues should be addressed by leaders at the G-20 summit," Mukherjee said.
Replying to a query on the reasons for the economic crisis, Mukherjee said, "the developed countries should not resort to protectionism. Development assistance should remain uninterrupted and transfer of resources should continue".
He said "some developed countries are worsening the crisis by trying to stop outsourcing which will adversely affect the IT service sector".
To a query on drop in inflation and price rise, Mukherjee said there was gap between the wholesale price index and the commercial price index.
"We will ensure that the gap is plugged", he said.