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FM hints at GDP hiccup

business Updated: Sep 07, 2009 21:16 IST
HT Correspondent
HT Correspondent
Hindustan Times
Highlight Story

Drought effect
GDP growth rate for the first quarter of fiscal 2010 was 6.1%, up from 5.8% in the previous quarter.
Following drought, Q2, Q3 likely to see growth slowdown.
However 6% target for the full year likely to be met.
Finance Minister warns of new challenges in terms of pressures over climate change.
The World Trade Organisation recently raised climate change issues and possible link to trade talks.
Mitigating global warming will require major investments.
The economy is somewhat shaky on the growth path after a dowturn year, Finance Minister Pranab Mukherjee signalled on Monday, and added that a new challenge was looming over developing economies as India becomes a key member world’s elite G20 economies – that of pressures over the climate change issue.

Mukherjee said the second and third quarters of the current financial year are unlikely to see the economy expanding at the pace it did in April-June period, but he stuck to the government’s original growth forecast of more than 6 per cent for the current fiscal year.

“So far as growth is concerned, I am a little doubtful whether the economy will grow at the same level in second quarter and third quarter as in first quarter. Agriculture growth may be a little less,” he told the Forum of Financial Writers.

Early signs of a recovery in India’s economy amid a global downturn emerged last week as gross domestic product (GDP) for April to June quarter grew 6.1 per cent, up from 5.8 per cent in the previous quarter, but the spectre of a drought in nearly half the country, threatened to pull down growth in the subsequent months.

“Financing of climate change was an area where there were divergence of views. They (the developed countries) want it to be within the purview of finance ministries and treasury departments of different countries,” Mukherjee said, speaking of G20 finance ministers' confabulations over the weekend.

Mukherjee said the United Nations Framework Convention on Climate Change (UNFCCC) should be the main channel for international negotiations of climate finance, and the discussion of climate finance should be consistent with the principles of the UNFCCC.

The G20 heads of states are scheduled to meeting in Pittsburgh later this month amid concerns that the developed world could force the matter into the main agenda of discussion.

The World Trade Organisation (WTO) has recently raised climate change issues raising concerns whether trade talks could be linked with it.

WTO director general Pascal Lamy last week said delivering a deal on climate change was a daunting challenge facing the international community.