India defers announcement on contribution to IMF
"We will make our announcement (of commitment to the IMF) after talking to the Prime Minister in course of time. We decided in the course of the BRICS meeting that some of our BRICS members would take time. So it was decided that let`s not announce right now," Finance Minister Pranab Mukherjee told PTI here.
India had earlier decided to increase its share in the International Monetary Fund (IMF), so that all the BRICS countries (Brazil, Russia,India, China and South Africa) would be among the 10 largest quota holders.
India`s quota share at the IMF would increase from 2.44 per cent to 2.75 per cent after completion of the quota reforms. In absolute terms, India`s quota would increase from SDR (special drawing right) 5,821.5 million to SDR 13,114.4 million.
"We will express our intention to contribute to the fund, but the exact amount we will communicate in time," Mukherjee said.
He said after the recently-held elections, the new government in Russia has not taken full shape. "The Russian government is not fully formed. After President (Vladimir) Putin takes over, then he will constitute his government. So it was difficult for Russia to make any announcement at this stage," he said.
"China also mentioned that they will take some more time for their internal process to be completed. Therefore Brazil also said that they will require some time. We did not have some compulsions like that, because in our decision-making process, it is easy," Mukherjee said, referring to the discussions BRICS Finance Ministers had here on this issue.
BRICS Finance Ministers are in Washington this week to attend the annual Spring meetings of the International Monetary Fund and the World Bank.
"With the approval of the Prime Minister we could announce. But as the others have decided to do it later, we also thought that let`s take the common position. Common position not as common contribution, but the announcement of the figures," he said.
Mukherjee refrained from making any disclosure of the amount that India would give to the IMF. "I will only tell the IMF," he said. The Finance Minister said India has emerged as an important economic player in the world theatre.
"Our place and recognition on the high table of policy making speaks of the economic development which has taken place over the past two decades," he said.
"Therefore it is not unusual that we play an important role in the decision-making process," he added. Meanwhile, IMF Managing Director Christine Lagarde has welcomed the indication by countries like India and Brazil to contribute to the resources of the financial body.
In a statement, Lagarde thanked all the countries that have already announced specific contributions, besides China and Russia which have given firm and specific commitments, which she said has increased fund resources by over USD430 billion.
"I am also grateful to Brazil, India, Indonesia, Malaysia and Thailand, all of whom have indicated that they will be among the contributors, which will raise the total further," Lagarde said.
"We warmly welcome pledges by our members to increase IMF resources by over USD430 billion, almost doubling our lending capacity," she added.
"This signals the strong resolve of the international community to secure global financial stability and put the world economic recovery on a sounder footing. These resources are being made available for crisis prevention and resolution and to meet the potential financing needs of all IMF members," Lagarde said.
They will be drawn only if they are needed, and if drawn, will be refunded with interest, she noted. European Union has contributed the most with about USD200 billion, followed by Japan (USD60 billion), South Korea, Saudi Arabia and Britain (USD15 billion each), and Sweden at least USD10 billion.
Earlier, in his intervention during a joint meeting of the IMF and G-20, Mukherjee said India has already ratified the 2010 quota increase.
"We have also confirmed that we will maintain our relative share of the new arrangements to borrow. Considering the gravity of the economic uncertainties we support the new funding initiative. Our exact contribution will be announced in due course," the Finance Minister said.
India, he said, will continue to play its role to assist the IMF in its efforts to augment permanent resources.
"However, governance issues are also linked with this and we are disappointed at the pace of the reform on quota and governance issues," he said.
"A dynamic process of reform is necessary to ensure the legitimacy and effectiveness of the Fund and the best possible means to improve governance and legitimacy is by ensuring that there is no slippage on crucial reforms," Mukherjee said.