India for effective framework to deal with global imbalances

Washington, Apr 16 (PTI) India has pressed for an
effective G-20 framework to address the problem of structural
imbalances and ensure sustainable growth of world economy.
"The success of this initiative (of G-20) is critical
for a durable global economic recovery and for better economic
and financial governance," Reserve Bank Governor D Subbarao
said at the G-20 ministerial meeting.
The G-20, which is a club of developed and emerging
economies, is currently engaged in formulating guidelines for
identification of large imbalances and suggesting corrective
steps. The structural imbalances refer to problems pertaining
to high public debts, huge forex reserves, etc.
He further said the leaders of G-20 tasked the central
banks to formulate indicative guidelines for identification of
persistently large imbalances requiring corrective action,
including their root causes and impediments to adjustment.
"We now need to finalise these guidelines... this
would focus on root causes, impediments to adjustment and
corrective policies and actions," Subbarao said.
He added an effective outcome is needed to provide a
signal the G-20 is not only serious in ensuring strong,
sustainable and balanced growth for the world economy going
forward, but it also intend to create an effective and
relevant institution for addressing current structural
problems in a fast evolving global economy.
Talking about debt, he said in India the public debt
is predominantly domestic and therefore India’s potential to
influence global systemic imbalances because of public debt is
negligible if not nil.