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Wednesday, July 18, 2018

Eurozone crisis: India may not pay $10 bn

India has pledged $10 bn for a plan to boost by $460 bn war chest for the troubled monetary union.

Written by Agencies | Los Cabos | Published: June 20, 2012 9:37:53 am

India may not be called upon to inject USD 10 billion (Rs 55,000 crore) it has committed to the IMF for bailing out debt-wrecked Eurozone if the global economic situation improves.

“The amount we contribute is entirely liquid,in the sense that the International Monetary Fund (IMF) assures contributors that it will be available whenever needed. It will,therefore,continue to form part of our reserves,” Prime Minister Manmohan Singh said in a statement.

The officials explained that the situation has not reached a point where the funds committed by Singh at the G-20 Summit yesterday would have to be transferred to the IMF.

According to R Gopalan,Secretary in the Department of Economic Affairs,“the country may not be called upon to give the money if the world situation gets better.”

India’s contribution to the IMF bailout fund,Singh said,“reflects our recognition that as a responsible player in the global community,we must play our part.”

The G-20 countries,he added,have responded to the need to enhance the resources of the IMF to enable it to play its role in the current situation.

“India has contributed USD 10 billion. BRICS and other countries have also contributed,taking the total commitments,including what was earlier agreed in April,to almost USD 460 billion,” Singh added.

According to Gopalan,”India’s contribution of USD 10 billion as part of the USD 75 billion pledged by the five- nation BRICS bloc to the IMF’s additional firewall is a message to the financial markets that a firepower is available to meet the contingencies and to give confidence and calm the markets.”

Pointing out that the Summit has taken place at a time when the circumstances are very difficult,the Prime Minister said,“my overall assessment of the meeting is that there was general agreement that policy in all countries must shift to strengthening growth. there was also general agreement that the most urgent problem we must tackle is to reduce uncertainty about the Eurozone.”

The Summit,he further said,also reiterated the standstill on new protectionist measures and extended it beyond the earlier commitment upto 2013 to 2014. “This is an important statement of intent by the G-20 leaders to resist protectionist tendencies,which typically increase in periods of high unemployment and low growth,” he added.

The Los Cabos Declaration,Singh said,also reflected India’s views that investment on infrastructure in developing countries could play a major role in strengthening development and in stimulating global recovery.

“The Declaration indicates that Multilateral Development Banks should be strengthened for this purpose. We would work with G-20 countries to transform their commitment to specific action,” Singh added.

The Summit also discussed a number of other important issues including especially the progress in regulatory reform,

issue of food security and agricultural productivity,anti-corruption measures and issues related to green growth,Singh said.

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