Shareholding of developing nations in World Bank, International Monetary Fund should be raised: FM

Dated 12th October, 2015

Union finance minister Arun Jaitley said as the share of the developing and transitioning countries in the world GDP increases from 39 per cent in 2008-2010 to 49 per cent in 2013-15, “the shareholding realignment should reflect the same and be completed by 2017”. On fiscal deficit Jaitley said that the country is firmly on the path of fiscal discipline and has contained the fiscal deficit at 4% (lower than targeted) a year ago. While India was suffering from double-digit inflation couple of years ago, CPI has dipped to a low of 3.7 per cent. He said that the commodity and oil prices decline have provided fiscal space for enhanced public sector investments in infrastructure and irrigation. “Such growth is also necessary for achieving the SDGs as well as the twin goals of the World Bank”, Mr Jaitley said.

He also highlighted the reform steps taken by the government in the recent past to push for higher growth and increase resilience that include liberalisation of investment policy, policies and procedures to improve business climate, transparent policy on allocation of natural resources, etc. Major taxation reforms are on the anvil, which require legislative action to become effective, he said referring to GST.

He said that Strong and inclusive economic growth is necessary for the developing economies to grow, prosper and develop sustainably.

The Finance Minister Arun Jaitley emphasised that the worldwide Monetary Fund (IMF) plays a very important role in the global economy, especially in the current context. Speaking at the event, Jaitley said that as the global economic recovery is still uncertain, the worldwide community should concentrate on unconventional methods for funding the SDGs.

India has witnessed less than normal monsoons for two consecutive years.

Jaitley also held joint conferences with the US Treasury Secretary Jacob Lew, Finance Minister of France Michael Sapin and Finance Minister of China Lou Jiwei. The issues discussed included Sustainable Development Goals, their implementation and monitoring and Climate Change Financing. On Thursday, he took part in the G-20 Finance Ministers meet.

IFC, an arm of the World Bank, which is already capital constrained, is now faced with the challenge of mobilising over $100 billion per year for climate finance.

IMFC is a key body providing strategic direction to the work and policies of the International Monetary Fund.

“I would like these resources to be mobilised from new and additional sources and not at the cost of ODA for poverty and shared prosperity goals”. The Finance Minister pointed out that resource flow under ODA should not be counted against climate change finance and any form of double counting under both climate finance and ODA should be avoided. There is need for genuinely new and additional resource flow to meet climate finance requirements.