By TIOL News Service

MOSCOW, JULY 21, 2013: THE G20 Finance Ministers and Heads of Central Banks yesterday expressed their firm support to the OECD's automatic exchange of tax information scheme. Netizens may recall the Indian Finance Minister, Mr P Chidambaram, and the RBI Governor, had also taken off on Friday morning to attend this event. After the meeting, the official Press Communique states that the a consensus was arrived at for putting growth before austerity so that the global economy is revived. All the Members agreed to adjust the stimulus with care so that the recovery is not adversely affected.

What dominated the two-day Summit was the possible move of the US Federal Reserve to reduce its monetary stimulus. This created a panic among the emerging markets facing sudden sell-off in stocks and bonds. Serious concern was expressed about Japan being not able to break the grip of deflation and Euro Zone showing no sign of recovery and job-creation. With unemployment rising up to 60% in Euro Zone, a lot of time was spent on debating the growth vs austerity. What has aggravated the crisis in the Euro Zone is the flight of capital. But it has been decided that more reforms would be undertaken to create a banking union in Europe and revive cross-border lending.

Meanwhile, on the issue of tax evasion and avoidance, the G20 has backed the OECD move to prevent MNCs from shifting their profits across borders to avoid taxes. They hope that in two years time the governments across the world would be amending their rules and joining hands together to curb transfer shifting by large firms.