G20 ministers in hectic efforts to reach a deal on imbalances

Chandra Shekhar

Paris, Feb 19 (PTI) Finance Ministers at G20 conferenceare working hard to evolve a consensus on a road map to dealwith global economic imbalances, which India says is not itsmaking.

Intense talks are on among ministers to arrive at anagreement on measuring global economic imbalances amidst atough resistance from China, and with India saying it does notwant a ''one size fits all deal''.

"A positive outcome is needed to provide a signal thatthe G 20 is serious on ensuring strong, sustainable andbalanced growth... and addressing structural problems in theglobal economy and that it is not simply a crisis fightingforum," Finance Minister Pranab Mukherjee said at the meetingof the G20 Finance Ministers here.

Opposing a ''one size fits all'' deal, he said India didnot contribute either to the buildup, or to the persistence ofglobal imbalances.

"Nor does it contribute to the volatility in severalinternational markets, including commodity markets," Mukherjeesaid.

The G20 developed and developing countries, includingIndia, China, Russia, Brazil, US, UK, Germany and France, hadformed an working group to decide on such indicators.

There have been proposals to frame indicators based onpublic sector debt, private savings, real effective foreignexchange rates and foreign exchange reserves.

Mukherjee said the objective should be to work towards aset of indicative guidelines that would reduce excessiveexternal imbalances.

China, sitting over large foreign exchange reserve ofnearly USD 3 trillion and having a big current accountsurplus, is fiercely opposed to these indices.

It, instead, wants trade surplus to be taken intoaccount.

India, on its part, has suggested that further effortsshould be made to reach a consensus on contentious issues,saying if there is no unanimity, "then that part of thecommunique can be deferred."

Mukherjee said India is vulnerable to seasonal factorsand their effect on the food prices.

"As a result of vagaries of weather, India has witnesseda high and unsustainable inflation on the food items,"Mukherjee said.

He said persistent high prices of food and commoditiesglobally "do not give us room for comfort in tackling foodinflation in India."

India''s current phase of growth has been more or lessevenly balanced between consumption and investment on the onehand, and between domestic demand and external demand on theother. .