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

Union Finance Minister Arun Jaitley emphasized the need for bigger financing and implementation plans by the World Bank Group to achieve the Sustainable Development Goals (SDGs); and need for the significant increase in the capital of the World Bank Group to meet the developmental objectives and review of the Bank’s shareholding to reflect share of the developing countries in the global economy. 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) previous year.

Similarly, he said that a couple of years back, India was suffering from double-digit inflation; now the inflation has dipped to a low of 3.7 percent. He said that the commodity and oil prices decline have provided fiscal space for enhanced public sector investments in infrastructure and irrigation.

India, he said, expects a dynamic formula for shareholding of World Bank to be finalised by Annual Meeting 2016. Major taxation reforms are on the anvil, which require legislative action to become effective, he said referring to GST.

In his intervention in the plenary session of the Fund Bank meeting, Jaitley had voiced strong reservation to unprecedented delay in implementation of the quota reform of the worldwide Monetary Fund saying IMF will be constrained in meeting its obligations in absence of governance reforms. Economic Affairs Secretary Shaktikanta Das, who also attended the IMF-World Bank annual meeting here tweeted, “India called for governance reforms in both institutions to reflect growing share of developing countries in global GDP”.

The 24-member IMFC is a key body providing strategic direction to the work and policies of the International Monetary Fund.

Meanwhile, the International Monetary Fund recommended that India will have to launch next phase of economic reforms and improve its business climate for faster and more inclusive growth.

The Finance Minister also participated in the Ministerial meeting on Climate Finance wherein he outlined the steps taken by India to deal with the problem of climate change. Such growth is also necessary for achieving the SDGs as well as the twin goals of the World Bank.

‘The country has witnessed a staggering 35 per cent increase in the indirect tax collections in the first six months of the current fiscal year. In particular, he spoke about India’s announcement of INDCs under which 40% of the country’s electricity will come from renewable sources by the year 2030. Also, there is the additional challenge of mobilising over $100 billion per year for climate finance. Provision of such finance by the developed countries should be new and additional without diverting the existing resource flow under ODA.

“He alluded to the uncertainty surrounding the recovery of global economy and emphasised the need to explore unconventional means to raise resources to achieve the SDGs”, a Finance Ministry report stated.