India against 'one size fits all' deal on global imbalances

Paris (PTI) - Amidst hectic efforts to reach a deal
on fixing indicators on global economic imbalances, India, at
the G 20 meeting on Saturday said it is not responsible for
creating volatility in the international markets.
The ministers from world's top economies are engaged in
intense talks to arrive at an agreement on measuring global
economic imbalances amidst a tough resistance from China,
and with India saying it does not want a 'one size fits all
deal'.
"India did not (and does not) contribute either to the
buildup, or to the persistence of global imbalances...Nor does
it contribute to the volatility in several international
markets, including commodity markets," Finance Minister Pranab
Mukherjee said at the G-20 Finance Ministers meeting here.
The G20 developed and developing countries, including
India, China, Russia, Brazil, US, UK, Germany and France, had
formed an working group to decide on such indicators.
There have been proposals to frame indicators based on
pubic sector debt, private savings, real effective foreign
exchange rates and foreign exchange reserves.
China, sitting over large foreign exchange reserve of
nearly USD 3 trillion and having a big current account
surplus, is fiercely opposed to these indices.
It, instead, wants trade surplus to be taken into
account.
India, on its part, has suggested that further efforts
should be made to reach a consensus on the contentious issues,
saying if there is no unanimity, "then that part of the
communique can be deferred."
Mukherjee told reporters that efforts were still underway
to arrive at a common ground.
Earlier, in his speech he said India is vulnerable to
seasonal factors and their effect on the food prices.
"As a result of vagaries of weather, India has witnessed
a high and unsustainable inflation on the food items,"
Mukherjee said.
He said persistent high prices of food and commodities
globally "do not give us room for comfort in tackling food
inflation in India."
India's current phase of growth has been more or less
evenly balanced between consumption and investment on the one
hand, and between domestic demand and external demand on the
other.
However, India has its own "share of concerns arising
from elevated commodity and asset prices and economic problems
of a more structural nature that underlie the uncertainties in
the global economy", he said.
Some of these uncertainties also derive from the
aggressive macro-economic policy response to the global crisis
itself, he said.
Finance Ministers at G20 conference
are working hard to evolve a consensus on a road map to deal
with global economic imbalances, which India says is not its
making.
Intense talks are on among ministers to arrive at an
agreement on measuring global economic imbalances amidst a
tough resistance from China, and with India saying it does not
want a 'one size fits all deal'.
"A positive outcome is needed to provide a signal that
the G 20 is serious on ensuring strong, sustainable and
balanced growth... and addressing structural problems in the
global economy and that it is not simply a crisis fighting
forum," Finance Minister Pranab Mukherjee said at the meeting
of the G20 Finance Ministers here.
Opposing a 'one size fits all' deal, he said India did
not contribute either to the buildup, or to the persistence of
global imbalances.
"Nor does it contribute to the volatility in several
international markets, including commodity markets," Mukherjee
said.
The G20 developed and developing countries, including
India, China, Russia, Brazil, US, UK, Germany and France, had
formed an working group to decide on such indicators.
There have been proposals to frame indicators based on
public sector debt, private savings, real effective foreign
exchange rates and foreign exchange reserves.
Mukherjee said the objective should be to work towards a
set of indicative guidelines that would reduce excessive
external imbalances.
China, sitting over large foreign exchange reserve of
nearly USD 3 trillion and having a big current account
surplus, is fiercely opposed to these indices.
It, instead, wants trade surplus to be taken into
account.
India, on its part, has suggested that further efforts
should be made to reach a consensus on contentious issues,
saying if there is no unanimity, "then that part of the
communique can be deferred."
Mukherjee said India is vulnerable to seasonal factors
and their effect on the food prices.
"As a result of vagaries of weather, India has witnessed
a high and unsustainable inflation on the food items,"
Mukherjee said.
He said persistent high prices of food and commodities
globally "do not give us room for comfort in tackling food
inflation in India."
India's current phase of growth has been more or less
evenly balanced between consumption and investment on the one
hand, and between domestic demand and external demand on the
other.