India is willing to chip in with $20 billion or roughly about Rs 100,000 crore over the next two years when its quota of shares in multilateral financial institutions including the International Monetary Fund and the World Bank go up.
But,unlike China,it is quite clear it would not commit any additional resources on its part towards the overall fiscal stimulus of $1.1 trillion that the Group of 20 leaders agreed to in London.
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We think it is better to husband our own foreign exchange reserves, a senior government official said. Indias $20 billion will go towards the capital base of the IMF,the World Bank and the Asian Development Bank,as they are restructured.
The three institutions are required to make extra funds available to the global economy particularly low and middle-income countries over 2009 and 2010,to pull it out of recession.
According to officials,the reforms of the IMF increasing the voice and representation of the emerging market economies do not come without a cost to the member countries.
For instance,Indias quota share in the IMF is less than 2 per cent now. For it to double or go up to 4 per cent,India will have to contribute $10 billion, said the official. The quota share review in IMF,originally scheduled by 2013,has been advanced to 2011 now.
P. Vaidyanathan Iyer is The Indian Express’s Managing Editor, and leads the newspaper’s reporting across the country. He writes on India’s political economy, and works closely with reporters exploring investigation in subjects where business and politics intersect.
He was earlier the Resident Editor in Mumbai driving Maharashtra’s political and government coverage. He joined the newspaper in April 2008 as its National Business Editor in Delhi, reporting and leading the economy and policy coverage.
He has won several accolades including the Ramnath Goenka Excellence in Journalism Award twice, the KC Kulish Award of Merit, and the Prem Bhatia Award for Political Reporting and Analysis. A member of the Pulitzer-winning International Consortium of Investigative Journalists (ICIJ), Vaidyanathan worked on several projects investigating offshore tax havens.
He co-authored Panama Papers: The Untold India Story of the Trailblazing Offshore Investigation, published by Penguin.
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