UPDATE 2-India praises G20 summit, says more needs to be done

NEW DELHI, Nov 21 - India's prime minister said a meeting of Group of 20 countries last week gave developing nations the kind of platform they sought but more work was needed to tackle the severe global downturn.

Global institutions must be made more representative of developing nations in today's interdependent world, but the summit meeting in Washington was a step forward, Manmohan Singh said on Friday.

"So I would say that there is a ray of hope that the world leadership of the leaders who matter have sat together, talked constructively, have come out with an outcome which should inspire confidence of the markets," Singh told a conference.

"But much work remains to be done. There are still many uncertainties about the depths of the recession, its possible length. So it will test everyone but a hopeful beginning has been made to tackle this problem."

Singh said he had been pessimistic about last weekend's meeting before he went, as developing nations had been invited to G8 meetings of developed nations before without their thinking having any impact on the outcome.

"I must confess that I was proved wrong. This meeting was very well prepared. For the first time the developing countries voice was heard with respect," he said.

G20 leaders from major industrialised and developing nations pledged steps to rescue the global economy from the worst financial crisis in over 70 years.

The turmoil has shaken financial markets worldwide, disrupted channels of credit between banks and industry, and pushed some major economies into recession.

The plan forged at the summit included short-term action such as fiscal stimulus to boost domestic demand, aiming to restart world trade talks, and expanding a financial stability forum to emerging economies.

Leaders also agreed on longer-term steps, such as reforming the International Monetary Fund, with finance ministers set to work on specifics by March 31, ahead of another summit in April.

Finance Minister Palaniappan Chidambaram said earlier in the week it was not quite clear to India whether U.S. President-elect Barack Obama's incoming administration was fully on board with what the Bush administration agreed at the summit.

But Singh said even though Obama did not attend the meeting, from what he had heard about the president-elect's viewpoint he thought "there are reasons to hope".

Indian politicians have pointed out the crisis, which began with the U.S. mortgage market, is not of their making, and Singh said the poor of the world should not pay the price for "the profligacy of the rich and delinquency of a few".

Global problems required global solutions, he said.

"The voice of the developing world must be heard in the high councils of global decision-making," Singh told the conference in New Delhi.

Indian authorities are struggling to shore up growth against the impact of the crisis and have taken a host of steps including sharp rate cuts to fend off damage to the broader economy.

Singh said despite an adverse international environment India had the capacity to sustain a growth rate of about 8 percent.

"We will, through the use of fiscal policies, through the use of monetary policies, through the use of public investment, ensure that the shortage of demand coming as it is from the global slowdown is neutralised to the maximum possible extent," he said.